4/30/11

Up, up, and away

A picture is worth a thousand words. Click on the chart to enlarge it.

Gas prices keep climbing. For how long will people be able to afford %50-$70 to fill up their tank? This is a major headwind for the economy.

Bernanke thinks commodity prices are transitory and have a minimum effect on commodities. It is a genuine lie to make us feel better.

Cheap money, however, has inevitably had an impact on commodities and inflation.

Eventually the majority of consumers will feel the pinch. The business cycle is alive and well with its moments of euphoria and despair.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/29/11

I am buffled by their deep ignorance about currencies

I was listening to Bloomberg. A great program. Yet answers about the sinking dollar were about China, the European central bank, the US Treasury, and the Fed.

Is the decline a good thing? A bad thing? Most analysts do not have the faintest idea of what drives currencies.

The trend of a currency is determined by productivity (or inflation) differentials and by relative government policies between two countries.

The sinking dollar is not -- let me repeat -- is not a positive thing. It reflects the idea that we are not capable to produce goods that are competitive in the global economy. We do not know how to produce machines and high quality products cherished around the world.

The rise in commodities is about our loss of purchasing power. For instance, countries with a strong currency do not see the rise in commodities in their own currencies. Just do the math.

We are losing purchasing power relative to the rest of the world. This means, for instance, that we look with admiration at the high-speed trains of Europe and China. We have to hire Chinese or German engineers to get a high-speed train in the US.

We are losing the war. We are losing the will to fight, to work hard, to make money. We expect that someone else owes it to us.

But we are losing. I wish the politicians or someone in the press understands what I am writing about.

I "made it" in this country because I worked 12 hours a day. I studied until there were no more degrees to conquer.

We have to get back to rolling up our sleeves and start working hard for a living. The markets are slowly and steadily moving us in that direction.

Because the markets always win.

I love this country because gave me so many good things. I hate to see people not understanding what the decline of the dollar really means.

Hopefully I convinced you. I really do hope so.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/28/11

The dollar keeps sinking

The dollar keeps sinking because profitability in the US is declining.

Investors are selling dollars to invest the proceeds in other countries. One of the ways to change the trend of the dollar is to change government policies.

Profits are under pressure because the majority of our industries do not make products competitive in the global markets.

The Euro is strong because Germany and the northern European countries make products needed by developing countries to produce state of the art merchandise and products.

The decline of the dollar is saying we are losing purchasing power relative to other countries.

We need to become smarter and work harder than the rest of the world. Social programs and new suffocating regulations are not the right medicine.

We must listen to the markets and understand what they are trying to tell us. The markets always win.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/27/11

Question

If the economy were so strong, how come LQD (high-grade corporate bonds) is soaring and XME, XLB, and XLE (resource ETFs) have been going nowhere for some time?

Are they trying to tell us something?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/26/11

About the dollar

Treasury Secretary Timothy Geithner said on Tuesday a strong dollar "will always be" in U.S. interests and that the Obama administration would not undercut the greenback to spur growth.

As always, it is the other way around. A strong country has a strong currency. A weak country has a weak currency.

The decline of the dollar since 2002 (click on the chart to enlarge it) is a reminder that we have become increasingly less competitive relative to the major economies of the world. The 10-year old decline of the dollar is a sad commentary of the policies pursed by our leaders!

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

About volatility

Investors and traders, in my humble opinion, do not have a good understanding of the implications of low volatility. VIX, in short.

Investors think that low volatility implies complacency. From a contrarian viewpoint complacency means high risk or an important market top.

Peter Dag & Associates does not agree. Our research shows quite the opposite. Low volatility, more often than not, points to a strong market.

We have developed a composite indicator showing the odds favor a strong market, as we are having today, when volatility moves in a well defined range.

The market is likely to pause for several weeks when our indicator moves above this range.

We have featured this gauge in the past two issues of The Peter Dag Portfolio with some success. Of course, past performance does not guarantee future results.

Please click here to subscribe.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/24/11

Observations

Behind the crisis (9/11). My friend SNS says I am an idealist and an academic. The reason I enjoy his friendship is because his sense of reality is quite different from mine. He has the rare combination of intellectual acumen with no-nonsense practicality.

More than once, as we discussed the issues facing the US, he voiced serious concern about the increasing gap between the educated and the less fortunate, between the higher and lower income groups of our society. “You see, George”, he told me several times, “what worries me is that this increasing disparity will create serious discontent which will eventually be difficult to control.”

In the past four weeks I found myself glued to the TV set, like everybody else, trying to learn more about what is happening. How are we reacting? What are we going to do? What will the implications be for us, for our children (my son works very close to the WTC)?

Suddenly, after almost a month of having been bombarded by news and special reports from Central Asia, the message became loud and clear. I had no doubt about what I was seeing. I was hit with the hidden meaning and much broader implications of what is happening in Central Asia and the Middle East.

I do not want to sound naïve. I know and agree we have to answer to the attack of September 11 with all our resources and commitment – emotional and financial. But the pictures on the TV set were showing tremendously poor people, treated like animals. They were running across mountains for survival. They had no limbs. No shoes. Kids crying. Living in tents. In the dirt. Not even animals are treated in this way in the industrialized world. Can they see a way out of their miseries? Death? Maybe.

Suddenly, the words of my friend exploded in my brain. Is it possible that what we have witnessed in early September is an act of desperation? The average annual income per capita for the Islamic countries stretching from Morocco to Bangladesh is $3,700. At the opposite side of the scale is the US with a per capita income of $37,260. Could it be that what we are observing is also a hopeless act of some of the poorest countries in the world against the industrialized, rich countries?

The protests taking place around the globe about the risks of globalization could also be viewed as another cry to capture the attention of the rich countries to help the poor and mismanaged areas of the world.

The answer we gave to these calls was to schedule the next G-8 meeting on a solitary mountain in Canada. This is clearly not the kind of dialogue we need to engage to help the poor people of the globe and minimize the increasing discontent.

Whatever meaning you like to give to the current situation, the issue remains. The Islamic countries harbor the poorest people in the world. After we wipe out the threat of terrorism, the industrialized world needs to develop plans to narrow the income gap between the Islamic world and ours.

We convinced China and Russia that democracy and free markets provide the best system to increase the income level of their population. I am sure we can also be successful with the Islamic world.

(This Observations appeared in the issue of The Peter Dag Portfolio of 10/15/01)

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/22/11

About commodities

At the beginning of the week, the Fed sent out its vice squad to counter the evil notion that its monetary policy could be stoking not just the rise in stock prices, but also commodities. The squad consisted of Janet Yellen, vice chairman of the Fed's board of governors, and William Dudley, president of the New York Fed, which also gives him the title of vice chairman of the policy-setting Federal Open Market Committee. Yellen and Dudley reiterated the FOMC's official line that the surge in prices of key commodities, such as crude oil, would have only a "transitory impact." (Source: Barron's)

Commodities are rising because real interest rates are negative. Short-term interest rates are close to 0% and inflation is 2.7%.

History shows quite clearly that commodities including crude oil and gold have been stable when short-term interest rates were well above inflation. The demand from China and similar nonsense are an excuse to confuse the real issue.

Prior business cycles suggest that with inflation at 2.7$% short-term term interest rates should be in the 3%-4% range.

Commodities will continue rising as long as short-term interest rates are kept articially too low.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/21/11

The latest Philly Fed business survey.

Results from the Business Outlook Survey suggest that regional manufacturing activity continued to grow in April but at a slower
pace than in March. Nearly all of the survey’s broadest indicators remained positive but fell from their readings in the previous month.

Increases in input prices continue to be widespread, and a significant percentage of firms reported increases in prices for their own manufactured goods. The survey’s indicators of future activity fell notably this month; however, most firms expect continued growth over the next six months.


Is the economy slowing down in spite of good news about earnings (click on the chart to enlarge it)?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/20/11

They do not know what they are talking about

They say: oil (gold, silver, ...) goes up because the dollar is weak.

Nonsense. The dollar is weak and commodities (gold, silver, oil, ….) are strong because money is cheap, real interest rates are low. This is what has always happened when money is cheap.

Please, you owe it to yourself. Check my presentation under “Understanding Financial Cycles” on my website. Just click here.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

Just in case you did not know

Commodities and in particular crude oil, gold, and silver rise when real interest rates are low.

For more details on the subject, please check the presentation I made in April on my website under "Understandin Financial Cycles". Just click here.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

Food for thought

About cutting our dependency of energy from foreign imports.

Are we aware that most European countries import most if not all of their gas and oil needs? Yet they survive and have a strong currency, suggesting they are doing better than we do. And we have plenty of energy sources here at home.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

The markets always win

The most affordable real estate in a generation is failing to lure buyers as Americans sour on the idea of home ownership. At the end of 2010, the fourth year of the housing collapse, the share of people who said a home was a safe investment dropped to 64 percent from 70 percent in the first quarter. The December figure was the lowest in a survey that goes back to 2003, when it was 83 percent. (Bloomberg)

People are beginning to learn to live within their financial limits. Renting has many advantages. The government sold a bill of goods in the past decades for the benefit of the real estate industry.

Who paid the price for the misguided social engineering of our politicians? We did.

But at the end the markets always win and teach us a lesson or two. Are we ready to learn?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/19/11

You can review my latest presentation

You can review my latest presentation made in April. Just click here. You will find it under the heading "Understanding Financial Cycles".

It will give you a good idea on the type of indicators I follow and their use. They are a small sample. The presentation will give you some ideas on how I use the business cycle to develop my investment strategies.

I am working on adding sound. My IT people are working on it. It should come shortly.

Enjoy it!

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/18/11

Did you notice?

S&P put the U.S. government on notice that it risks losing its AAA ranking unless officials agree on a plan by 2013 to reduce budget deficits and the national debt.

Treasuries and high-grade corporate bonds rallied strongly today as stocks and junk bonds declined sharply.

The markets seem to tell us that if we want to bring our deficit in check, bonds are the place to be in. Bill Gross does not agree, however.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/17/11

Observations

Why!!! The people of our country are gentle people. One time I stopped the traffic in both directions to let a family of mallards cross the street and jump into the lake. I was surprised when all the drivers smiled and raised their hands with their thumb up as a sign of approval. We are creative and generous, ready to help, assist the needy. We are wealthy and we use this wealth wisely by creating many programs for the poor. Inside and outside our country.

Our system makes us powerful because it unleashes the best in us. There are not many restrictions, as in most countries, to achieve our dreams if we are ready to work hard. The system supports this type of endeavors because it is clearly understood that if one is successful the others will benefit as well.

But it is very difficult to manage power and understand how other nations perceive it. Even businesses, when they become too big, are attacked by competitors. If they do not succeed in keeping their size under control, competitors resort to government influence to break them down. The recent cases of Microsoft and GE fall clearly in this camp.

It is difficult to hide power and wealth when your size dwarfs the size of all competitors. The way we act. The way we deal with people. Any small body language is interpreted the wrong way. The aggressive expansion of our companies around the world causes people to worry about the dangers of globalization. There is also concern and resentment by some groups about our effort to protect financially and militarily our friends.

I have a small library behind my desk. Not more than 130 books. They are the ones that shaped my way of thinking. The top shelf has such books as The Rise and Fall of Great Powers, Modern Times, Nomenklatura, and Free to Choose. Diplomacy, by H. Kissinger, is also on the top shelf.

The latter is the book that comes to mind during these trying times. Why? One of the purposes of diplomacy is to work with foreign governments in order to understand their mood toward us. Its aim is to create an environment where a balance is reached in our relationship with other countries.

What I am suggesting is that what happened on September 11 should be perceived as a sign that we have ignored for too long how the world feels about us. This hate has strong and pervasive roots that we failed to acknowledge and do something about. They did not grow overnight. We are now acting to exterminate terrorism. We are taking the right initiatives.

However, I sincerely hope that we learned the lesson and remember to begin constructive negotiations with the world and find out how to bring this ugly hate toward us under control.

(This Observations appeared in the issue of 9/29/01 of The Peter Dag Portfolio)

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

The markets always win

Greece has announced plans to sell 50bn euros (£44bn; $72bn) of state assets in a bid to get its finances back on track.

Government stakes in the utility power company PPC, the telecom operator OTE and ATEbank will be sold off by 2015.


It is time to give up everything they controlled as they were seeking wealth and power. Just for the sake of wealth and power, without worrying about the economic health of the nation.

In the next few years tax receipts in the US will be used mostly to pay the interest on our debt. It is possible we have to face similar problems as Greece.

What we are seeing right now is an enormous transfer of wealth from us to the bond holders. This is the real meaning of government deficits.

We will realize this tragic truth when we will be asked to give up many of the nice benefits we have enjoyed in the past decades because the bond holders want to be paid.

The markets always win.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/16/11

My presentation made in April is available for your review

You can review my latest presentation made this month. Just click here.

I am working on adding sound. My IT people are working on it. It should come shortly.

Enjoy it!

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

Trends

April 16 (Bloomberg) -- Treasuries gained, pushing 2- and 10-year yields down the most in 11 months, as U.S. inflation cooled, speculation rose that Europe’s debt crisis is worsening and stocks and commodities dropped on a loss of risk appetite.

The corporate bond market (high and low grade) seems fairly stable. Stocks have been pausing since February.

Copper is showing little change since the beginning of the year. Lumber is plunging, reflecting a still weak housing sector. CRB and oil are in a rising trend. Agriculturals have been weak since February.

Bottom line. Imteresting trends. Nothing dramatic has changed. I find interesting the strength of the bond market in the face of firm commodity prices. It may suggest the bearish economists may be right about the slowdown in the economy.

But then, how could they explain the rising trend of the stock market and of commodities with industrial production up a strong 5+% y/y?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/15/11

Interesting day

As of 2:00 pm the market is fairly strong. Usually LQD is weak when the market is strong. Not today. LQD is up a firm 0.54%. Not surprisingly JNK is firm (because of the strength of the market), but weaker than LQD. LQD is even stronger than XLB (materials).

It looks like the markets are saying the economy is slowing down and we should not trust the strength of commodities. Some smart people (John Taylor and Feldstein) are saying the economy may be slowing down sharply in the second half).

Should we hedge commodities with LQD?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

About China

It is possible that my business cycle studies do not apply to China.

However, rising inflation and rising interest rates are not bullish omens for equity markets. Can China be different?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/14/11

About the Euro


The Euro is strong because the new Europe will be without the Mediterranean countries and will be totally dominated by Germany. The Euro stands for DMark.

The recent increase in interest rates in Europe shows that the decision has been made. The Mediterranean countries will have to leave and adopt a Euro2.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/13/11

If they are right....

From MarketWatch: Q1 GDP estimates slashed post-trade data (ht jb)
Morgan Stanley slashed their estimate to 1.5% from 1.9% after what they called "a very weak report." RBS Securities cut their estimates to 1.7% from 2% ...
And from Catherine Rampell at Economix: G.D.P. Forecast for First Quarter Slides

Today, after an especially weak report on February’s trade deficit, the [Macroeconomic Advisers'] economists lowered their first quarter G.D.P. estimate to a sorry 1.5 percent annualized.
So Macroeconomic Advisers' forecast has gone from a "paltry" 2.3% to a "sorry" 1.5%! (Source: Calculated Risk)


Maybe this is the reason bonds are much stronger than what everybody expected.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

Question

How do you stay "ahead" when you live in a country with a weak currency?

A weak dollar reflects a weak country. Meaning: its citizens lose purchasing power relative to the rest of the world.

From a US citizen viewpoint living in the US, one has to be smarter than the average person to stay ahead of the average person. It will allow you to purchase more than the average person. The outcome is that you will feel like you stayed ahead.

From a global viewpoint, you need to go to a country with a strong currency and be as productive as the average citizen.

This is what I did several decades ago when I came to this country. It was an excellent decision because I worked harder than the average person. The outcome has been that I gained relative to the average US citizen and relative to the country I came from.

Jim Rogers, the great investor, moved to Singapore. Same idea.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/12/11

Do you see the trade?

Stocks very weak.
Commodities tanking.
LQD (in spite of what BG says) are very strong.
JNK marginally weak.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/11/11

Something to watch

The first thing I do in the morning is checking commodity prices,This is a great site to do that.

When oil and the other commodities were rising out of control on Friday I wrote that it was scary.

It looked like a bearish spike, a trend to sell into it. This morning commodities are weak and oil is close to $111. It may have a negative impact on the market.

Asia and Europe are weak.Bond prices are muted. But they should like weak commodities.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/8/11

Scary

Commodities are out of control. Soaring.

Oil is jumping again more than $1 to $111.56. Copper, gold, agriculturals very strong.

The markets are telling the Fed they are missing the boat. Too easy. Very dangerous game is being played right now.

Commodities are doing the tightening for the Fed. Who is being punished is the consumer.

I might be too cautious, but what is happening is not healthy at all.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/7/11

The decision has been made on the future of Europe

The ECB started raising interest rates because they fear inflation.

To protect whom?

The strong countries of Europe: Germany, the Netherlands, UK, France,.... The ECB knows that raising interest rates will be a disaster for the Mediterranean countries and Ireland having debt problems. But they made their decision anyway.

Why?

They do not want to undermine the economic health of the strong countries of Europe -- the backbone of the European Union. It is the only way to save Europe by isolating the crisis, let the poor countries sink and do not let the problems propagate to the strong countries.

The weak countries (including the Eastern Europeans ones) will be left alone with their debt and spend-spend-spend problems.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

The markets always win

The Fed does not want to tighten because they want the economy to gain strength.

However, 0% interest rates and dangerously low real interest rates are causing commodities to boom.

The outcome is that consumers' purchasing power is steadily eroding because of the increase in crucial commodities such as food and energy.

Corporate profits are also being steadily eroded because of rising raw material costs and a slowdown in productivity -- the main reason for the weakness of the dollar.

The net effect is a tightening by the markets as the Fed remains asleep at the wheel.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

Worrisom trends

Commodities keep soaring with oil above $109. Copper and gold are strong. Broad rise in agriculturals.

Markets around the world are going nowhere.Yields want to move higher.

The strength in commodities is beginning to sound ominous. Equity futures suggest a flat to down opening in the US.

Is the strength in commodities killing the market momentum.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/5/11

I will speak in Akron

Hello.

I will speak in Akron, OH on 4/6/2011 (tomorrow) on the important lessons I learned in the past 30+ years in managing money.

Location: Akron Main Library (downtown) 60 S Street 330-643-9000
Time: 6:30 pm
Parking: free at the library parking lot after 6:00pm
Cost: absolutely free

Please, do come and humble me with your questions. I am looking forward to seeing you there!

George

Resistance

I keep looking at the charts of the major sectors to get a sense of the strength of the market this morning.

It looks like they are all hitting important resistance levels - the top reached in February. This is the bad news.

The good news is that the market could rally quite strongly if all these sectors, including the S&P 500, breach their resistance levels.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/4/11

Technical patterns

Copper has been rising since last September and TLT tanked.

Copper peaked in February and TLT bottomed.

Copper declined since February and TLT kept rising in spite of Bill Gross prognostications.

What if Dr. Reich is right (see post below). This is exactly what the business cycle says it should happen.

A weak economy is followed by weaker commodities and lower bond yields (higher bond prices).

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/3/11

If he is right.....

Why aren’t Americans being told the truth about the economy? We’re heading in the direction of a double dip – but you’d never know it if you listened to the upbeat messages coming out of Wall Street and Washington.

Consumers are 70 percent of the American economy, and consumer confidence is plummeting. It’s weaker today on average than at the lowest point of the Great Recession.
(Click here to read the whole article by Dr. Reich)

If he is right the business cycle suggests we should see strong bonds and weak commodities with equities going nowhere.

Let's wait and see.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

Oops!

From the FT of 4-2/4-4.

The White House has been forced on the defensive about the choice [of Mr. Immelt as the chair of advisory committee on jobs and competitiveness] after GE aggressive tax planning strategies and accusations the the group had not paid a cent of tax in 2010.

"Can America afford Medicare when [GE] is not contributing?" (Andy Stern, former labor leader).

"The thing I was baffled by is that under Immelt's helm, GE has increased global employment but closed 25 factories here" (Scott Paul, executive director of the Alliance for American Manufacturing.

Democratic activist groups are asking for Mr. Immelt resignation.


Wow!

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/2/11

Global business cycle

WASHINGTON -- The J.P. Morgan global manufacturing purchasing managers index fell to a three-month low of 55.8 in March from 57.4 in February.

Is the global economy slowing down because of what is happening in Europe, Middle East, and Japan?

Is this the reason why for copper and gold to decline and TLT (long bonds) to firm?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

4/1/11

Food for thought

Employment very strong. Finally. Does it reflect a strong economy?

Why then corporate and long-term Treasury bond prices rose? LQD rose. Gold and copper sagged.

Are the markets telling us not to trust the figures just released by the government?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.

Thought of the day

Do not be mislead. What drives commodities and oil in particular are not the global uncertainties.

All commodities, and I mean all of them, are rising because of cheap money. Because of low real interest rates.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.