3/10/11

Interesting pattern

This is what I noticed.

The market was very weak. Commodities sank. LQD very strong.

Is Bill Gross wrong? Is there still life in bonds?

The aswer is provided by the business cycle.

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.

Technical patterns

How low could the S&P 500 go?

It is no secret that stocks tend to retrace 50% of a rally in a bull market. In S&P 500 terms the average could decline to 1200-1225, which is about the halfway point between the bottom of July 2010 and the peak of February.

What I found interesting is that this range is also the top of the S&P 500 in April 2010.

Right now the S&P 500 stands at 1295. The S&P 500 could decline another 7% (give or take a reasonable margin of error).

When will the bottom could take place, if the above scenario becomes a reality? We have developed several indicators giving us the duration of the decline. More details in The Peter Dag Portfolio.

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 bad news -- suddenly

March 10 (Bloomberg) -- Stocks slid, driving U.S. and European benchmark indexes to near the lowest levels since at least January, the dollar rose and copper fell as American jobless claims increased, export growth slowed in China and Germany and Spain’s credit rating was cut.

As I mentioned yesterday, watch for weak commodities and rising volatility. The market ignored the global problems, but there are many: European banking crisis, the US banking crisis with municipalities in trouble, and the unrest in he Middle East..

In spite of this mess there are still asset classes performing well. It is not surprising to see, for instance, LQD gaining this morning with the market down 1.50% -- if you read my previous posts.

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.

3/9/11

Technical patterns

I was looking at the chart of the S&P 500 and two patterns came very clear -- that of the market in November 2010 and that of the past few weeks. Then and now stocks were trading in a narrow range. The November pattern eventually developed in a strong up move.

What will happen to the current market indecision?

In November volatility spiked as stocks traded in a narrow range. Commodities soared after a brief correction. Volatility eventually declined as the market resumed its rise.

Does this mean that for the market to rise from current levels it takes a decline in volatility and a strong move in commodities (CRB)?

Time will tell, of course.

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.

Business cycle and crude oil

Commodities rise when the business cycle is in Phase 3 as the Fed plans to stop easing because of its concern about inflation.

This is the main reason commodities are rising. Phase 3 implies strong demand.

A recession has always been anticipated by Fed tightening. The increase in burlap, zinc, wheat, copper, or crude oil prices do not necessarily anticipate an economic slowdown unless inflation becomes a major issue.

More on the next issue of The Peter Dag Portfolio.

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 dollar and the Fed

Any currency reflects the productivity differential (output per man hour) between two countries and government policies on investment and education.

The weakness of the dollar reflects the low global competitiveness of most of our industries.The money printing of the Fed attempts to compensate for this lack of competitiveness and stimulate the economy.

My point is that it is not the money printed by the Fed that weakens the dollar. If our economy were strong and competitive in the global markets in the first place the Fed did not need to print excessive amounts of money to make it grow.


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.

What the Arab World's Past Can Tell Us About Its Future

The following comments are taken from a well-written article, which can be read in its entirety by clicking here. It spells out the historical evidence surrounding the Arab world and how the recent unpredictable unrest could be looked at.

Few other regions that the United Nations Development Program (UNDP) examines in its regular Human Development Reports have done so poorly in so many ways as the Arab world. The education system is miserable and the illiteracy rate extremely high in most countries in the Arab League. Almost half of the adult population cannot read or write in Mauritania, Morocco and Yemen, while illiteracy rates are at 28, 30 and 38 percent, respectively, in Egypt, Algeria and Sudan. Until a few years ago, even sub-Saharan Africa had more Internet connections than the Arab world.


Few regions are as unproductive. All the Arab states together, with their combined population of 350 million, produce less in economic terms than Italy's 60 million people. Only 3 percent of the Libyan population works in the oil sector, which, until recently, accounted for more than 60 percent of the gross domestic product. What exactly did the rest of the population do? Official youth unemployment is at 26 percent in a rich oil-producing country like Saudi Arabia, while the unofficial rate in the countries of North Africa's Maghreb region lies at 70 percent. One-third of the people of Mauritania and Yemen, and one-fifth of Egyptians, live on less than $2 a day.

The Arab world isn't poor. But no region of the world has treated its resources -- and half of its labor force, namely women -- as negligently. Only about 5 percent of members of parliaments in the region stretching from Morocco to Bahrain are female. And while more than 16,000 international patent applications were filed in South Korea alone between 1980 and 1999, only 77 were filed in Egypt in the same period.

In no Arab country, with the exception of Lebanon with its proportional democracy, are there significant signs of an emerging civil society. Nowhere is there a democratic tradition which could provide a basis for those who plan to govern in the wake of the revolutions of recent weeks, not to mention those revolutions that could still be to come.

…… the most urgent question of the hour is not whether the Islamists or secular parties come to power in Egypt, Tunisia, Libya and later perhaps Syria and Jordan. The most urgent question is: Who will solve the enormous economic problems of these countries, and who will close the gaping prosperity divide? More than half of the population in the Maghreb countries is younger than 30. Who will create the 700,000 jobs that are needed in Egypt alone to provide wages and food for the students graduating from school in a single year?

It is obvious that the countries of the Middle East cannot perform this task alone, no matter who is in charge. In addition to the rich oil-producing countries, the West, and particularly neighboring Europe, should step up to the plate [as the USA did with the Marshall Plan for a devastated Europe].

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.

3/8/11

The markets always win

Anger Brews Over Government Workers' Benefits. When Erin McFarlane looks at public workers, she sees lucrative pension benefits she doesn't ever expect to get. And it makes her mad. (Source: CNBC)
 
As long as we were in a period of rapid growth and wealth-building economic environment, we did not notice the gross market distortions because we were doing well.

Now, with the economic growing slowly and high unemployment, these distortions are noticed and Erin is right in getting upset.

Those of you who follow my idea of power groups can sense a shift in which groups are gaining more power. And which ones are losing it.

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 dollar

Any currency reflects the productivity differential (output per man hour) between two countries and government policies on investment and education.

Low productivity relative to another country indicates low profit opportunities. Capital therefore flees to high productivity countries in search for higher profits. It buys the currency of the high productivity country, thus making it stronger.

A weaker currency does not only indicate lower profitability relative to other countries but it may suggest weaker economic conditions in the low productivity country.

The dollar movement is not due to the Fed or other mystical operators. Is due to the simple idea that most of our industries are less productive than those other countries. It may even suggest slower economic conditions ahead.

The markets always win.


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.

3/7/11

To my subscribers

No indicator is perfect. Nothing in life is sure. This is the reason it is important to talk about odds.

The indicators (long-term and short-term) I review for you are not perfect. But in my humble opinion have attractive odds. Personally, I follow them very closely to develop my strategies.

I will keep you posted on their position this coming Sunday.

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.