Peter Dag & Friends

6/4/10

What is copper telling us?

A protracted decline in copper typically signals a weaker economy ahead.

The interesting pattern is that copper has reached a major support level (c;ick on the chart to enlarge it).

Did you notice that in a major down day for stocks copper finished up? It could be a sign of strength.

Time will tell, of course.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 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. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Interesting trend. The dollar remains strong.

In the past 7 months, strength in the dollar coincided with market weakness.

The problem facing the markets is that the dollar is still very strong, suggesting risk is high and rising. Give thanks to our European friends.

You have to be a European (I lived there until I was 27yo) to understand the incompetence of their leaders blinded by the total commitment to control their economies. The Europeans are paying the price for having big governments!

The castle they built is crumbling. It is unfortunate that we are also paying for their greedy mistakes.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

6/2/10

To my subsscribers.

I told you so! (They know what I mean)

Interesting

News. FORTUNE -- Every few years, market chatter about a coming wave of privatizations swells into a sea of noise and anticipation. Inevitably, the wave crashes, and private investors are usually foiled in their attempts to buy bridges and roads from states and municipalities. The details may change, but the basic theme stays the same: politicians realize that selling a toll road to Blackstone (BX) is no way to get re-elected.

My Point. First keynes told governments to spend, spend, spend.

Now the market is telling governemnts sell, sell, sell.

The pendulum keeps swinging. The important idea is to be aware of it.

Bullish signs?

INSIDERS CONTINUE BUYING THE DIP. The recent spat of buying was the largest weekly buying since the depths of credit crisis near the market lows in 2008.

On other news, in spite of an uncertain tape, advances outnumber declines on the NYSE and NASDAQ.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

Not good

News. No companies issued bonds in the U.S. yesterday, compared with $2.2 billion on the corresponding day following the Memorial Day weekend in 2009, according to data compiled by Bloomberg. In Europe, 1.35 billion euros ($1.66 billion) was raised from two sales of covered bonds, versus 6.5 billion euros a year earlier, Bloomberg data show

Wall Street banks are pulling back from providing capital that helps clients trade, making it harder for Loomis Sayles & Co. to purchase the corporate bonds that the $145 billion investment firm seeks.

My point. If corporations do not issue bonds and banks are not lending...well...the system is frozen. And this is not good for the markets and the economy.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

Interesting chart patterns

This is an interesting chart (click on the chart to enlarge it). You should notice two patterns.

1. The rising channel. It is crucial that the transportation keeps within the channel.

2. Above average volume, more often than not, indicates a near term bottom.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

The markets always win.

News. Greece plans to sell stakes in the state-owned railway and water companies as it “accelerates” the privatisation of assets to help reduce a budget deficit.

“We decided to accelerate the privatizations process,” Greek Finance Minister George Papaconstantinou told reporters in Athens today. The government will sell 49 percent of the Trainose unit of Hellenic Railways Organization SA, 23 percent of Thessaloniki Water & Sewage Co SA, the country’s second- biggest water company, and minority stakes in casinos.

My point. What should I say. The markets always win. One thing I do not read about. A cut in the salary of the politicians. They remain the protected elite social class in every country.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

6/1/10

Interesting indicator

I reviewed this indicator for my subscribers (click on the chart to enlarge it).

It is interesting to note that it dropped precipitously in 2007 at the top of the bull market.

It jumped in March 2009 at the bottom of the bear market.

In the past few weeks it declined sharply as in 2007.

Of course I beg you not to rely on any one indicator. It just shows how technical analysis can help you assessing the weakness or strength of the market and the direction of risk.

This is also another example of the kind of research you can expect when you subscribe to The Peter Dag Portfolio.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

And they said........

The European markets are down more than 2.5% early this morning.

The markets are speaking. The European social democracy model is a failure. They said their form of socialism was better than our idea of capitalism. Europe is becoming a source of instability in the global economy.

They are proving that government programs are bound to fail if a country does not produce the wealth to pay for them.

Governments do not produce wealth. They are not designed for that purpose.

This is the reason we need markets. To tell us if what is going on in the world capitals is a scam or not.

The markets always win.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest