Sunday, October 5, 2008

Time to Share

The Big Picture posted this humorous take on how the markets really work (I'm beginning to believe that this is not too far off from the real thing):

Contrahour posted two very interesting videos that I am going to embed below. One has the opinion of billionaire Jim Rogers on the current economic crisis, what he sees, and what he would recommend or not recommend. The other contains a longer interview with Warren Buffet covering similar material, albeit with a different perception.

I also have three pertinent graphs:

The first is the NYSE Bullish Percent Index. As mentioned before, it has gone below the 30% level, a level that once it breaks back through normally triggers a decent rally (the red circle is one instance where coming down from 70 the BPNYA did not drop much). The percentage of stocks above their 50 day and 150 day MAs is also pretty low, nearing 2001/02 values. Now, I may be mentioning these graphs because I purchased some SPY on Friday and am hoping for a rebound (probably only likely if there is a rate cut); but, even if that does not happen, it is a good idea to keep the BPNYA in mind. It is a fairly reliable indicator.

Looking at the SPY chart confirms a new low and a triple bottom breakout. In the long run we will hit 97 and maybe go as low as 72. I'll sell this if the futures turn red. And, as for SOL, if it is not trading up in the pre-market, I am thinking about getting out. I like the stock because of its low P/E, but considering the PF chart, breaking below 9.50 is not ideal (unless you are buying). And it is getting closer.

My advice may lead you to bankruptcy. Therefore, use the info above at your own risk. Take care.

PS: Not to belabor a political point on an economic website, but I dislike both presidential candidates. I would vote for Ron Paul, but I think he is a little crazy too. In fact, I am thinking of doing a write in for my mother. But that does not mean I do not enjoy reading and learning about politics and the various politicians that have power in our country. For instance, I read an article (by Rolling Stone, so it is liberal leaning, but well done) about how the life story McCain presents on the national stage differs from what actually has happened in his life. Some of the differences include: McCain is no outsider (as though you could not figure that out; he's a 72 year old senator who was not elected yesterday). His father and grandfather were both four star admirals who helped push him through schools and ranks (and past crashed aircraft that would normally stall advancements). McCain even flew on an airfield named after his family: McCain field. The article is a bit long, but it is an interesting read. It is called Make Believe Maverick.

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