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Urban Survival...
Emotions & Markets: Waiting for my Entry Point
Time to cowboy-up, get really steely-eyed, and make some good investment decisions. Like Baron Rothschild, I think it was, said "Buy while there's blood in the streets" and I'm smelling opportunity close at hand. No money on the table yet, but I'm ready to buy chips.
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You may recall that last December around the middle of the month, I explained what my outlook was -- in very general terms -- for 2009. As I outlined it then, I was expecting a market low to be put in by around the beginning of March, and thereafter, we ought to see a rally to perhaps July or so, and then it would be time to 'load the boat' on the short side, because there would be a lot more scary times to come on this roller-coaster ride which is the financial markets.
Despite being a little late in getting here (but the markets do run on their own clock), we're getting mightily close to the point where I'm tempted to throw in a few bucks on the long side, because despite the wealth of bad news, the market 'feels' to me like it could do a decent run up; something I outlined in boring detail with charts and all for Peoplenomics subscribers last weekend. So, over the next couple of days, I'll be moving a little cash into the commodity account, where I've been eyeing the price action in oil and the precious metals, and then some into the stock trading account where I've got my eye on some interesting options. Not pulling the trigger on any of these yet, but I'm sort of wandering back to the dice table, if'n you know what I mean.
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Not that I'm in any particular hurry for it, because while the rally's going to be sweet - and pour a little money into my piggybank, it also means that by next November (or even mid October), people will be playing the game of financial duck & cover again, only this time, we'll be dropping 7-thousand points from a much lower diving board, such that we could hit Dow 3,000 (or worse) in early 2010. So, if you think things have been exciting here lately, you ain't seen nothin' yet. But for now, I've got a smile on my face, and positions to consider. Not everyone lost money during the Great Depression before, and there's no reason to do so this time, as long as the broad brush of history is kept in mind.
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This morning, in a few minutes from my usual posting time) we will get the consumer confidence numbers. This is a key for the rally to 'get legs' because if the reading is anywhere from neutral on up, that will mean the consumer is either ready to start spending again. But, if it's really bad, it could spin the markets back toward the downside.
Not that I care. Construction spending tomorrow, and then Thursday, and the all-important unemployment report Friday all have the potential to drive the markets lower. Which would set up my entry point next week sometime, just prior to Good Friday. Anyway, that's my thinking for now, this isn't investment advice, and I should consider joining Gamblers Anonymous, I suppose. Scratch tickets, one armed bandits, dice tables, or options; it's all along the same line. But, then again, so's banking lately...
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One reason I'm holding onto gold, I mean besides the obvious inflation that will be unleashed by the maniacal spending out of Washington lately, is that as the G-20 meets in London, there's actually discussion that Gold may come back into some kind of monetary role. Gold doesn't have to be the only standard, but even partial convertibility would likely firm up prices. Longer term, I figure gold's bound to double from here, and silver's got to play catch-up along the way, too. So that's why I am considering gold call options for my commodity account.
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I assume that you've been watching the price of gasoline? I'm expecting that as we get closer to the summer driving season, the price of petroleum will begin to climb. It's already moving as "Crude oil rises, set for biggest monthly increase since June" is one of the stories on Bloomberg this morning. Very short term, oil's under $50 in some markets this morning, but that's to be expected and a stock market low next week roughly coinciding with a small pullback in oil prices would be just fine by me.
Even though the One-Worlders may not get their global currency agenda shoved through the G-20 meeting (yet), even a modest global recovery (on happy-talk, if nothing else) has the potential to move oil back to the $80 level, or maybe higher.
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The tensions in the country, if this were a sociology class, make a very interesting study. "Workers say "Obama treated autos worse than Wall Street" says an AP report.
What's more, the government's "Substance Abuse & Mental Health Services Administration" has opening a new website feature called "Getting through tough economic times". Replete with\
This website is about the best indicator I can think of, when it comes to timing my return to a bullish stance. You may remember Ure Axiom 528?
"By the time government gets around to fixing something, it's probably no longer broken..."
Just so. Call it a confirming indicator. A bounce off 7,200, or even 7,100 on the Dow next Wednesday could trigger my buying rampage.
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"OECD says govt policies will avert Depression". Yeah, yeah, sure. I'll grant you that as the pimping of 'good times' here through early summer gets rolling, it may seem that way, but as the time monks note, this fall's going to be ugly...very ugly indeed. I'll be printing while the sun shines.
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Rally Driver?
On Thursday the Financial Accounting Standards Board will decide how much lunacy is safe in the mark-to-market rules. As a story headlines here: "Mark-to-Market Lobby Buoys Bank Profits 20% as FASB May Say Yes."
Don'tcha love it? When you start off learning accounting, it's all this must be this way, and thus and so. And then along comes new rules which are exceptions to common sense.
Ure Axiom 76: "If you can't sell something, or there ain't no buyers, it's market value is zero."
Too obvious? Apparently.
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Math
Reader note about our give away money idea:
"40 million people over 50 times $1 million each is 40 x 10^13, or $40 Trillion. Whose side are you on?"
I am the People's Economist! $40 trillion and no unemployment and yada yada is still going to be cheaper than the cost of what comes next. Trust me. We're at what, $8-9 trillion and we haven't even started. Wait till this November when it occurs to everyone all at once "OMG we wasted everything we had in the way of financial bullets and it's still broken."
Drop it to half a million per person, cost is a push for sure and you get nearly the same outcome.
Hum...so Urban Survival is pretty cheery about the June 2009 - June 2010 I guess. HA! I do not think it will be as bad as this guy is saying it will, but I do agree that the next couple of months will be a brief breather, and then we will continue the downward trends until there is "blood in the streets"...yes I am saying that has not happened yet. Happy Tuesday!
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