Peter Dag & Friends: December 2011

12/31/11

The end of the dream

(NYT) - PERAMA, Greece — The free clinic here opened about a year ago to serve illegal immigrants. But these days, it is mostly caring for Greeks like Vassiliki Ragamb, who was sitting in the waiting room hoping to get insulin for her young diabetic son.

Four days earlier, she had run out of insulin and, without insurance and unable to pay for more, she had gone from drugstore to drugstore, pleading for at least enough for a few days. It took her three hours to find a pharmacist who was willing to help.

Is this what the Euro was supposed to bring? The European socialists should give up their crazy effort to save the Euro and let the markets work and bring prosperity. Reward the rich culture of the European continent!

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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 European collapse is inevitable

(Der Spiegel) - Since its inception, the euro zone has been built on lies, the most grievous of which is the idea that the common currency could work without political union. But Europe's politicians are currently suffering under a different but equally fatal delusion -- that they have all the time in the world to fix the crisis.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/30/11

The problem of Europe is productivity differentials between countries.

This is an example of why the Italian austerity programs will not work.

A few years ago I had to fly to Rome to witness the following process.

My mother had to sell two stores. The buyers and the sellers had an attorney each to make sure the paperwork was correct.

Enter the NOTARY. The Notary is a powerful individual representing the government in all financial transactions without working directly for the government. The Notary had to transcribe (using pencil and eraser) all the conditions of the transactions in all minuscule minutiae. It took hours.

Notaries in Italy are a very powerful and wealthy class of professionals because they represent the government and also offer legal services.

There are very few Notaries in Italy and it is very very very difficult to become one. In Italian parlance ... " you need to be recommended by a cardinal to become one."

No Italian austerity program will eliminate this redundant bureaucratic function remnant of the Spanish invasion of Italy in the middle ages.

And this is just one simple example. Another one I just read on the FT ... Mr. Monti - the new PM - could keep Microsoft at bay when he was the European Union’s competition commissioner, but could not change the cartel of the taxi drivers in Rome.

Is Italy going to change? Can you break all the vested interests and guilds causing Italian productivity to be so low?

You can guess my answer.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/29/11

Seasonality patterns

Until May ...seasonality patterns.

Firm stocks market.
Rising commodities (all of them).
Rising gold.
Rising yields.
Weak bond prices (Treasuries).
Firm high-yield bond prices.
Continued upward pressure on short-term interest rates (US$ Libor).

Will the historical patterns repeat? Time will tell.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

What caught my attention

GLD is plunging. Down to an important range: 145-150.

These are the levels of May-July when GLD traded in a narrow range. Then it moved strongly up.

These levels represent a formidable support level. Volume is strong. Is a bottom in sight? Finally?

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/28/11

What to do?

I keep reading negative news. Everybody is concerned about a collapse - economic and financial.

Recessions. Depressions. In Europe. In Asia. Every country seems to be vulnerable.

This is a good time to keep cool. Stay calm. Think on your own.

How? Now, and always, you need to cope with uncertainty. Uncertainty is a state of nature, game theory suggests.

You have to have a process to deal with it. A process is a system that helps you making decisions. Helps you establishing strategies. Choose the right one for you. Change it as events evolve.

How? My approach is discussed in many videos on my site www.peterdag.com. It is not the only process. But it is a process I learned and tested managing billions of dollars.

It is not designed to make you money. It is designed to manage risk. Manage the downside risk.

Be patient. Devote some time to review my videos. They are free. It takes a lot of work. You will improve by adding your approach.

But you have to have a process, especially during times of high uncertainty. Giving up is not enough. You have to play the game if you want to win.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

Technical patterns

What really matters right now is the 1250-1275 range for the S&P 500. It could very well be a bullish pattern if the average closes above these levels.

Utilities - weak - were much stronger than the market.

Stay tuned.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/27/11

What did I notice today?

The market is going nowhere.

Utilities are very strong.
Business cycle sensitive - financial, materials, industrials, metals - weaker than the market.
Gold - another commodity? - weak.
High-yield bonds are firm.
Volatility sharply higher.

What does it mean? A nervous market playing it defensive.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/24/11

It is the other way around

(Dollarcollapse.com) - A single country can benefit by making its currency less valuable, because a falling exchange rate gives its exporters a pricing edge in global markets.

It is unbelievable. People do not understand that currencies reflect productivity differentials between economic areas.

The yen is strong because Japan is a very efficient country. Like Germany. Like Sweden. Like South Korea. Like Taiwan.

What all these countries have in common is a surplus in the current account balance. It is their efficiency that creates a strong currency. A strong country economically has a strong currency.

Exporters of efficient countries create a strong currency because people want to buy their products. Buyers sell their currency to buy the currency of the seller.

By doing so they weaken the currency of the buyer and strengthen the currency of the seller.

The country with most competitive industries has the strong currency.

Countries or central banks do not make their currency weak. It is their lack of productivity and poor economic management that make their currency weak!

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

Statistics

Since the beginning of the year a sound high-yield mutual fund we have been recommending for some time had a total return of 5.5% (S&P 500: 2.7%) as of 12.24.2011 (Source: charting programs offered by Morningstar),

In the last 5 years total returns were 31.0% and 0% respectively. Since 9/8/2004 total returns were 51.7% and 31.7% respectively, according to the Morningstar program.

Hard to believe! This is what compounding does to investment returns.

The charting program? Click here.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

My latest presentation

My latest presentation can be reviewed by just clicking here. It is about Europe and investment strategies in the current economic environment.

A comment I received was...I have to think in a different way. ..Enlightening.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

Moral hazard

(Bloombeerg) - The ECB loaned banks a record 489 billion euros ($636 billion) for three years on Dec. 21 to avert a credit crunch from the sovereign debt crisis. The central bank said earlier this week that the turmoil has taken on systemic proportions not seen since the 2008 collapse of Lehman Brothers Holdings Inc.

It seems to me that as long as the banking system knows that governements and central banks are ready to help them, banks will continue to avoid risk management.

Unless we let banks fail, financial crises will be prolongued and we all have to pay.

We can defend ourselves by being wise investors and recognizing the power of the printing press of the central banks. Financial markets strive on liquidity.

The next really great opportunity? Shorting bonds. When? I do not know, but I am working on it. If what happened to yields in Italy, Greece, .... is any lesson, interest rates will have to rise by several mmultiples in the US.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/22/11

What caught my attention today

The S&P 500 was stronger than utilites (XLU) and consumer staples (XLP) and weaker than energy (XLE).

Does this mean the market is changing and rewarding riskier assets? Is this an important bullish sign?

Time will tell.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

Here we go

(Der Spiegel) - Armed with 45 experts and 30 years of experience, Horst Reichenbach is in Athens to help the Greeks economize and institute reforms. His conclusions about their situation are sobering, but he also reports a new sense of determination for tackling the debt crisis there.

Germany has started the job of "germanizing" the weak European countries. Make them more efficient.

Will they send people also to the USA to show us how to become more productive? Interesting development, don't you think?

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/21/11

Observations

Greed. The press is excited about the sharp movement of the Nasdaq and technology stocks. The focus is again on this class of assets.

It looks like business is beginning to spend more on IT. This development adds to the thrill of investing and to the belief investors will soon recover the huge losses of the past three years.

Our subscribers are well aware of what is happening and are asking us why we are not recommending technology stocks. There is a nuance of greed in their voices and the feeling they may be left out of the party.

What amazes me is how little time it takes to forget. A rally of just two months and investors ignore what they had to endure in the last 3 years. They forget that value, products, profits, low debt, and dividends are the recipe for a successful stock investment program.

Investors are still not convinced that the 1990s were abnormal years as far as investment returns are concerned. The objective of the investment game is to find undervalued assets relative to the market.

The graphs of the Nasdaq and the S&P 500 tell the story. Technology stocks are considerably more volatile than the large cap stocks, and over the long term they appreciate exactly by the same amount.

The bottom line is that unless you are an exquisite timer, technology stocks are not a superior investment over the long term.

(This Observations appeared in the 12/16/2002 issue of The Peter Dag Portfolio).

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/20/11

Another thought of the day

A trend is in place until it is broken.

This is the reason why appropriate trendlines and moving averages should be in the arsenal of every investor.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

Thought of the day

Bond yields have become the equivalent of what it used to be the meaning of exchange rates.

It used to be that the least efficient country had the weakest currency. Now, in the new world of high leverage, the least efficient country has the highest bond yield.

Markets are very efficient and they cannot be fooled. Even if the politicians try hard to do so.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

Ahead of the opening

Strong market today. It is impressive how everything is so correlated. Stocks, bonds, commodities - including gold.

The aim of the strategy has come down to how much alpha or beta you want in your portolio.

I keep track of low beta and high alpha investments.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/19/11

European "democracy"

Interesting development ... building a bureaucracy ....unelected ...to control Europe.

Is it possible? Is it true?

Thought of day

The business cycle works!

The economy slowed down.
After a few months commodities weakened.
After a few months inflation peaked.

What should happen now that an important lagging indicator such as inflation is declining? The answer is in my videos (free) on my site.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

Questions

(Bloomberg) - “There’s clearly a concern that it’s just a matter of time before France is downgraded,” said Nick Stamenkovic, a fixed- income strategist at RIA Capital Markets Ltd. in Edinburgh. “That’s making investors pretty cautious on France,” which is weighing on the bonds, he said.

French 10-year bond yields rose four basis points, or 0.04 percentage point, to 4.0 percent at 9:03 a.m. London time. The 3.25 percent security due October 2021 fell 0.345, or 3.45 euros per 1,000-euro face amount, to 101.27.

Belgian two-year note yields climbed 14 basis points to 2.74 percent, while its 10-year yields advanced 10 basis points to 4.40 percent.

Are yields bound to rise substantially in a country heavily in debt? Are the low yields in the USA and Germany manipulated or are we in a depression?

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/17/11

Question of the say

The Libor rate (London interbank borrowing rate in US$) has been rising since June.

Is the short-term money market tightening? Or is this an end-of-year seasonal phenomenon?

I watching this trend quite closely.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/16/11

Late night thoughts

I just reviewed the latest data for the week.

Governemnt bond yields down in all the industrialized countries.
Commodities down ...metals...food...industrials.
Gold ... weak. Silver and other precious metals ...down.
Oil and nat gas ... down.
Ethanol..sharply lower.
Stock market .... going nowhere.

It smells like deflation. These trends could be bad news for profits. Lower prices will force business to cut costs .... margins under pressure.

It is just one week. Let's hope these trends recverse soon.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

The market always wins

(Bloomberg) - U.S. and Asian companies seeking acquisitions in Europe may accelerate dealmaking next year after a slowdown in the second half, beckoned by a slumping euro and share prices depressed by the sovereign debt crisis.

The cycle.
A country loses its competitiveness.
Trade deficit increases.
The currency declines.
The country implements austerity programs.
The economy is in a recession.
Prices decline.
The currency slumps.
Foreign investors step in and start investing in the country.
The economy improves.

This is what is happening in Europe. Is the same cycle applying to the USA?

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

Market patterns

Are the markets in sync again? The pattern seems to be repeating and hopefully is going to be a good day. This is what the futures are doing as of this writing.

Stocks ... up
Yields ... up
Bond prices .. down
Commodities ... broadly up
Gold ... strong, up
Dollar ...weak
High-yield bonds ... fairly stable
Foreign markets ... up

I am looking forward to making some money today ... hopefully.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

Interesting

There is the possibility, as The Guardian suggests, that the European leaders want to create a deep recession in Europe to make the Southern countries more competitive because of lower costs and wages. The same approach has been followed in Latvia.

If so, strong deflation is very likely. Will the other western countries be simple observers?

All prices will decline. Interest rates would first rise sharply. Then they will decline as the deep recession becomes a reality.

Interesting scenario. Is the European Titanic doomed?

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/15/11

Heading for the European breakup

(Der Spiegel) - Not even a week after the most recent European Union summit aimed at ending the debt crisis, panic is mounting once again. But not in Berlin. Chancellor Merkel calmly told parliament on Wednesday that a solution would take years and German central bank head Jens Weidmann compared demands for ECB intervention to an alcoholic grabbing for the bottle..... With virtually the entire world convinced that the euro zone has not done enough to save the common currency, Merkel remains stoic in the face of demands to erect a gigantic firewall. On Thursday, she ruled out increasing the size of the permanent euro backstop fund, the European Stability Mechanism, beyond the currently planned €500 billion ($648.5 billion).

The Germans are set to bring some sanity into the European political system. The problems is the patients are incurable.

What is interesting is that the European approach to solving their financial problems is the opposite of what has been done in the US. They want the private sector/banks to pay the price.

The tire will hit the road during the 2012 European recession.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

Correlation?

Stocks are going to open up today. Strong. In response to a strengthening economy.

The other markets seem to follow quite closely (as of this writing).

Stocks ... up.
Commodities .. up.
Gold ... up (barely)
Yields ... up.
Dollar ... down.

It is mostly a typical pattern.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/14/11

Technical patterns

GLD and GDX sank with huge volume. This is a typical bullish pattern.

Let's hope so.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

Concerned. Is this the way it was supposed to be?

(Bloomberg) - Letter bombs and bullets mailed to officials have prompted Italian Prime Minister Mario Monti to warn of political violence returning to Italy.

In recent days, anarchist groups have spray-painted Intesa branches in some parts of Rome with graffiti and slogans such as “Down with Banker Thieves!” On Oct. 15, protesters rallying in an “Occupy Wall Street” demonstration set fire to cars and shattered windows at banks and a supermarket in Rome. The flags of Italy and the European Union were also burned at a hotel.

Is this what the Euro was supposed to bring? They promised peace and prosperity with the advent of Euro. Is it worth it? The people of Europe are saying a resound "NO"!

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

To my subscribers

In spite of today's massacre in all asset classes (except Treasury bonds), the stocks listed on page 2 and page 3 of The Peter Dag Portfolio are down a small fraction of the market. Some are actually up as of this writing.

Value. Dividends. Momentum. Three important features of our selection.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

We have the same problems as Europe

(Bloomberg) - Investors, spooked by bank analyst Meredith Whitney’s prediction of “hundreds of billions of dollars” of municipal defaults in 2011, started fleeing the market in record numbers, sending interest rates soaring, according to Craig Sheagren, the hospital’s chief financial officer. As bond buyers ran, JPMorgan Chase & Co. (JPM) and other underwriters stepped up with offers of loans, letting the institution bypass the public markets.

Even after Alabama’s Jefferson County became the biggest government bankruptcy in the nation’s history and some defaults surged, the annual average 10-year borrowing cost for top-rated states and local governments dropped to 2.37 percent Dec. 12 and remained there yesterday, according to a Municipal Market Advisors index. That was the lowest rate since the company began collecting the data in 2001.

Meredith was right. It is not her fault if counties are going bankrupt and municipalities cannot borrow.

Italy, Greece, Spain, Portugal, and Ireland have the same problem.

You cannot borrow if you are not generating the wealth to pay the interest on the loans.

The markets always win. Always.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/13/11

Europe. What is happening?

Did you notice Europe is not in the news – suddenly? Not a word. Not even in Der Spiegel. I still believe Germany has decided to let the banks pay the price for lending the money to unreliable countries. And cross your fingers.

Risk is still rising, however. Commodities are weak. Gold is down - acting as a commodity.

Volatility is down. Complacency? Or someone knows something we do not? Good for the market.

The market is down. But the stocks we listed in our latest issue are holding up. The lesson? Bet on quality. Dividends. And momentum.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

What am I watching?

Commodities (CRB index) are weak. It looked like they had bottomed, but is declining again.

It bothers me because equities and commodities are highly correlated and this should be bad news for the market. besides, their trend suggests the economy is not as strong as we would like.

The good news is that volatility (VIX) is declining and swap rates are below the peak of December.

Measures of risk are still rising, however. But gold is still weak and some observers are saying the odds favor more weakness ahead.

An uncertain market, needing more definition. There is no trend.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/12/11

Amazing, but to be expected

(Reuters) - A European summit deal to strengthen budget discipline in the euro zone failed to restore financial market confidence on Monday, forcing the European Central Bank to step in again gingerly.

(Bloomberg) - The euro fell the most in two weeks versus the dollar as Moody’s Investors Service said it will review the ratings of European Union nations after last week’s summit failed to produce decisive steps to end the debt crisis.

What amazes me is that the Europeans just, simply do not get it. They seem to not understand the gravity of the situation they are in.

Unless....unless...this is the plan by Germany to break away from the Euro. It looks like they are saying ...you guys have to shape up or the Union is not going to happen. This is the first point.

The second point seems to be that the private investor has to pay the piper. Not like in the US that the taxpayer had to pay for the so called good of the nation.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/11/11

Full moon indicator

It is that day of the month -- full moon.

Let's see if even this month the market rises around the full moon days.

I know, it's crazy, but the market rises more often than not during the days close to the full moon.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

Observations

It is very interesting to think about how the mind works, how we assemble our thoughts -- seemingly out of nothing.

Take, for instance, dreams. For several years I have been dreaming of a wide body passenger multi-jet plane. It was landing in very narrow streets. The plane was landing on crowded steep hills and taking off from the same streets.

Electrical wires were overhanging the busy streets. Tramways or busses use the same wires in New Orleans or some European cities. The airplane, somehow managed to stay below this network of power lines.

One time the airplane stopped in front of a white arch full of roses and geraniums on a cliff overlooking a spectacularly blue ocean. A very Mediterranean setting.

One day I understood the dream. The little narrow streets are the alleys in a neighborhood of Genova (Italy) were I was born. The area is called “carrugi”, close to downtown. These streets are just a few feet wide and are full of any type of stores and shops. Very unique.

The arch is located on the island of Ischia, a marvelous place close to the more famous island of Capri. The village of Castel Sant’ Angelo is an immaculate location on the sea.

My grandfather was a tramway conductor. One day he stopped the tram in the middle of the street to hug me as I was leaving the railroad station. I just arrived from Rome for my annual visit to my grandparents.

The airplane was, of course, related to my father who was a captain of Alitalia airlines. He lived a risky life as he participated from the ground up in the evolution of civil aeronautics since the late 1940s.

Now that I solved the puzzle, and it took me several years to do so, my mind seems to be satisfied with the explanation. My dream is now dead and hiding somewhere, peacefully at rest.

(This Observations appeared in the 11/25/02 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.

12/10/11

To our subscribers

Treasury 30-year bonds fell for a second consecutive week as a European agreement for closer fiscal union reduced the haven appeal of U.S. debt and reports showed the economic recovery strengthening. (Bloomberg)

As we predicted some time ago using our proprieatry indicators. You know what to do if you want to take advantage of this trend.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

No comment

....the emergence for the first time of a cold new Europe in which Germany is the undisputed, pre-eminent power imposing a decade of austerity on the eurozone as the price for its propping up the currency.(Source: The Guardian).

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

EU COUNCIL STATEMENT

A lot of work. A lot of words. A lot of bureaucratic optimism.

If everything is so rosy, how come the US$ libor rate is soaring?

Does Germany want to get rid of the EU and live without being associated to financially broken countries?

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/9/11

What caught my eye -- today

GLD weaker than GDX.
JNK up. But TBF much stronger.
VIX below 17, much lower that the high in August (close to 45).
LQD down.
KRE one of the strongest sectors.
Utilities very strong.
Commodities (DBC) weaker than the market.
Agriculturals (DBA) sagging.

I think this is a very interesting action of the markets in response to the totally meaningless news form Europe.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/8/11

Why do we need this new agency?

The Consumer Financial Protection Bureau is expected to operate on a budget of just $550 million. That is 10 percent of what the Fed operates on and just over half of what the Securities and Exchange Commission spends as a the securities industry cop.

Senate Republicans say they have the votes on Thursday to successfully scuttle Democrats' efforts to get former Ohio Attorney General, and Jeopardy champion, Richard Cordray confirmed to lead the new bureau.

Republicans insist their problem is not with Cordray, whom President Barack Obama nominated for the job in July, but with how the bureau is designed.

Bureaucrats love to convince us that we need to be protected because we are so stupid that we cannot do it by ourselves.

Let the market decide. Let the market tell us what are the successful or unsuccessful services or products.

In Europe they are trying to conceive a similar monster. They want a new agreement to police the budget of the EU countries. Let the market tell who is doing a good job or not. Bond spreads are a great simple tool and will save an enormous amount of money to the already over-taxed European citizens.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

12/7/11

Something to think about

"When you buy a house, you’re not just committing to a mortgage. You are also promising to pay the future property taxes on that house. What drives those local property taxes are the future costs of paying state and local workers and retirees, particularly retirees’ pensions and health care. These costs are going in one direction: up.

Unless state and local governments take steps now to reduce future costs, or unless they plan on suddenly repudiating their promises to their public-sector work forces one day, every dollar in unfunded pension and health-care costs is up to a dollar less in the future value of a house." (Source:Nicole Gelinas, NRO article "How Taxes Drive Down Home Values")

In other words, we will have to pay higher taxes to fund pension funds that are based on too generous actuarial assumptions. Someone has to to keep the coffer full. And that is us. Is it fair?

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.

European disappointment

The markets are down because one more summit European meeting did not deliver what the markets would like to hear.

Merkel wants centrally controlled fiscal discipline . The problems is that they do not need it because the markets are doing the same job in a much more efficient way.

The next idea would be a political union. This is also off the table. The local power structures do not want to give up their earned privileges to a supranational authority.

What is the alternative? More of the same, with slow dismemberment of the European Union.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

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.