"What to say, what to say.  Nothing said, what a waste." – Eddie Vedder, Pearl Jam

Well, well, well, where do we go from here?  The first half of the year was a wild and wooly ride, from an opening slide to a rally back up and then a retest of the 1^st quarter lows.  Looking back at the article from the beginning of the year, I seem to have done fairly well and now it is time to look ahead to the second half of 2008 and early 2009.

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First, I would like to make mention of my prediction that Hillary Clinton would win the presidency.  Before the primaries begin it is tough making this type of call but I do believe I have the party right as the Democrats will sweep adding seats in the House and Senate, while retaking the White House. 

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Party head Howard Dean deserves a significant amount of credit for retooling so swiftly.  After the 2004 election it appeared the Democrats had their backs against the wall but he not only righted the ship but orchestrated an amazing turnaround.

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That said, both candidates, Barack Obama and John McCain are not pro-business and I expect that weakness to be covered with the selection of Vice-Presidential candidates.  Two last names to remember are Webb and Romney.  Webb can help turn a major red state blue while Romney brings a pro-business background.

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In addition, the selection of the next Treasury secretary will be extremely interesting. 

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One final political comment, the race for the White House will be closer than people think.

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Now, onto the economy, stock markets, and commodities.

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Slow economic growth will continue into 2009 as the ....US.... gets hit by continued uncertainty from the business community over the Democratic Party's policies and the Option ARM mortgages which will begin to reset.  If an 'official' recession will happen it will happen late this year, early next when the new government can get it out of the way as has been done many times in the past.

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The US Federal Reserve is now trapped with no way out.  On one side is the financial industry which needs wide spreads in order to rebuild their balance sheets.  The second side consists of homeowners who have seen the equity in their homes disappear as housing prices fall back to normalized levels.  A third side is the new administration which will not want the Fed to impose additional pain on the consumer and economy teetering on the verge of a recession.  The fourth side consists of Option ARM's holders whose mortgage will start to reset.  Meanwhile, commodity prices will continue to rise and consumers' budgets become even more pinched. 

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The stagflation which began in April of last year will continue for the foreseeable future.

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The fallout in the banking sector will be hit less hard than most expect due to increased attention following the problems of the last 12 months.  The ones who have problems will be those who have not properly prepared for the upcoming resets. 

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Look for strong or large banks to begin acquiring weaker banks in the large cap and mid tier sector.  Mid cap banks with exceptional balance sheets will be in high demand during the capital rebuilding phase as excess capital will be at a premium.

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As for the stock market, expect continued sideways movement.  Call it a bull or call it a bear but you should look at a graph of the Dow Jones Industrial Average going back over 100 years.  On it you will see periods lasting approximately 15 to 25 years where the average moved sideways setting the stage for the next major bull market.  It is my opinion that we are more than halfway through this sideways movement with at least another 4-6 years to go and any major moves within this trend are sideways moves with a bull market beginning sometime after 2012. 

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Looking over the Asian markets, two that pique my interest are ..Taiwan.. and ....Japan.... for different reasons.  ..Taiwan.. due to closer ties with ..China.. which should reinvigorate the business sector and ....Japan.... as it finally begins to emerge from deflation.  The Japanese emergence is on the backs of the commodity bull market which is forcing prices higher for Japanese goods.  The key here will be when personal income emerges from its malaise and begins to rise.  That is the inflection point.

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Oil and commodity prices – Yes, a stronger dollar should hold down prices to an extent but as the price of gold and other commodities in terms of Euros and Yen shows, it does not stop the advance, just slows it down

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Gold & Silver – The next oil.  The forces keeping the price at bay and within a trading range should acquiesce to market pressures and new job pressures as their terms wind down and thoughts turn to acquiring new employment.  In other words, if your job was pretty much ending the first Tuesday in November would you be concerned with the gold/silver price or would you be looking forward to a vacation/new job?

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Gold and silver are at important inflection points.  Sometime within the next few weeks we will begin to emerge from the base they have built over the past few months.  I would like to see Gold prices fall by $100 and silver prices fall $3-4 dollars one final time before we take off.  There are some moving averages which I would like to see touched before the next liftoff.  The averages are still a bit too high for my taste but I have been scaling into gold stocks over the past month so one cannot complain. 

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For those wondering what gold stocks will do well I will disclose my measuring stick.  I am only interested in juniors with a mine of at least 8 million ounces of gold and/or 100 million ounces of silver.  Why those numbers you ask?  They seem to be the measuring sticks for the majors when considering investing in juniors who love 10-15 year projects. Large projects are cornerstone projects which you can build a company around and/or allow them to more than replace a year's production. 

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If the management is really aggressive they can use the project to begin acquiring other mines and create a new mid-major or major mining company. 

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Mergers between companies similar to Rio Tinto-BHP Billiton are not unlike the merger between AOL and Time Warner.  Signs are appearing that an end to the commodity bubble is approaching.  Investors should take note that despite all the talk of commodities being a hot sector, some hard asset prices have collapsed.

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Investment picks – gold, silver, cattle, lean hogs, fish, and chicken.  Basically, any kind of meat or fish as skyrocketing feed prices flow through from feed to meat and fish prices. 

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As an additional aside, I sold my oil and coal stocks last week and plan on buying back my positions in a few months. 

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Communications are intended solely for informational purposes. Statements made should not be construed as an endorsement, either expressed or implied. This blog and the author is not responsible for typographic errors or other inaccuracies in the content. This blog may not be reproduced without credit or permission from the author.  We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE ..OPPORTUNITY.. FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.  This is not intended to be investment advice or a solicitation to purchase any of the securities listed here.  I will not be held liable or responsible for any losses or damages, monetary or otherwise that result from the content of this site.

I have been buy lately so I have not had the opportunity to update the blog.   The Recommended List has changed significantly in the past month and if you are interested in receiving the latest copy and future updates you can contact me either through a message through the myspace site or email at mystockreports@yahoo.com.

Communications are intended solely for informational purposes. Statements made should not be construed as an endorsement, either expressed or implied. This blog and the author is not responsible for typographic errors or other inaccuracies in the content. This blog may not be reproduced without credit or permission from the author.  We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.  This is not intended to be investment advice or a solicitation to purchase any of the securities listed here.  I will not be held liable or responsible for any losses or damages, monetary or otherwise that result from the content of this site.

As a member of the Philadelphia Museum of Art I was treated to view the forthcoming exhibition by Frida Khalo this past Saturday.  The exhibition itself is timed to coincide with the 100^th anniversary of her birth.

For those who may not be familiar with her work, Frida is a Mexican artist who married celebrated Mexican artist Diego Rivera and whose work and life is much revered by Mexican women worldwide.  But this exhibition is not about her history or cultural reverence.  The exhibition is about her art and it is stunning.

The volume of work presented (photographs of her and her paintings) was overwhelming to say the least.  The pain which she felt during her life was clearly evident in her work as painting was used as an outlet.  Less surrealism and more introspective, in my opinion, she used art as the medium through which she expressed her love, pain, and failings.

I highly recommend this exhibition to everyone as it details the life, times, struggles, pain, and success of the artist who was Frida.

This is not an exhibition for children.  The subject matter that she deals with range from her husband's infidelity, the pain suffered from the accident early in her life which left her unable to bear children, and her feelings of anguish at not being able to bear children.  These subjects are clearly evident in her paintings.  Chances are the woman who stood behind me in line with her 8 and 10 year old felt satisfied for exposing her children to art and no doubt the 10 year old boy enjoyed seeing 'boobies' the children were far too young to understand and appreciate the subject matter in the exhibition. 

A lesson for the soccer moms, exposing your children to the arts at a young age is a good thing as art and music programs are being cut nationwide which will cause problems for our society going forward.  But take time to do research before exposing children to the subject matter and determine if it is appropriate for their age levels.

Anyone interested in contacting the author of the blog can either send a message through the myspace site or via email at mystockreports@yahoo.com.

Communications are intended solely for informational purposes. Statements made should not be construed as an endorsement, either expressed or implied. This blog and the author is not responsible for typographic errors or other inaccuracies in the content. This blog may not be reproduced without credit or permission from the author.  We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.  This is not intended to be investment advice or a solicitation to purchase any of the securities listed here.  I will not be held liable or responsible for any losses or damages, monetary or otherwise that result from the content of this site.

Commodity feelings

Gold – Bullish                                                               Copper - Neutral

Silver – Bullish                                                  Zinc - Neutral

Nickel – Neutral                                                           Lead - Neutral

Tin – Neutral                                                                Platinum – Bearish

Aluminum – Neutral                                                      Palladium - Bullish

Oil – Neutral                                                                Natural Gas – Bullish

Sugar – Bullish                                                  Wheat – Neutral

Cotton – Bullish

Commentary: 

Summer is coming to a close in South Africa which means power needs are peaking.  Think before you go long platinum at this stage in the game. 

Silver continues to sputter forward but technically the charts are set for a pullback to the $15.50-$16 level while still remaining in a longer term uptrend that tops out slightly above $18.50. 

Silver stocks however, have languished behind bullion so a countertrend rally where the stocks outperform the bullion is not out of the question as valuations catch up to spot prices. 

Gold is about to resolve the head and shoulders pattern forming in the daily charts going back to the beginning of the year.  The Point & Figure charts show an arrow formation which would more than likely resolve upward.  Needless to say, this chart action is confusing to say the least.  Hopefully, we get a resolution this week as nothing major of note happened in the overnight hours. 

Gold equities have performed well alongside bullions move up this year.  The coming months will be interesting as buying ahead of India's traditional spring buying should be starting shortly but Indian buyers have been waiting for a pullback to the $825 level.

Anyone interested in contacting the author of the blog can either send a message through the myspace site or via email at mystockreports@yahoo.com.

Communications are intended solely for informational purposes. Statements made should not be construed as an endorsement, either expressed or implied. This blog and the author is not responsible for typographic errors or other inaccuracies in the content. This blog may not be reproduced without credit or permission from the author.  We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.  This is not intended to be investment advice or a solicitation to purchase any of the securities listed here.  I will not be held liable or responsible for any losses or damages, monetary or otherwise that result from the content of this site.

Those who are subscribers to the Chart of the Day at chartoftheday.com should take important notice of Friday's chart.  It shows the Dow 30 at an important juncture.  Since October we have been in a downtrending channel and now stand near the top of the channel.  More importantly, if one notices the bottom of the channel they will see a spike down one day and an immediate rise the next.  That was the SocGen problem.  Subtract that outlier event and we may have a W shaped double bottom.  This week should go a long way to resolving the short term pattern. 

Contrast the Dow chart with last week's chart where they talk about the NASDAQ being at the bottom of a long term upward sloping channel.  It gives you an indication of the tug of war going on in the financial markets right now. 

While the selloff on Thursday and early Friday looked worrisome, the market moved higher in the afternoon which is a good sign heading into this week.

The Advance-Decline lines are moving along their lows and the New Highs/Lows are still moving lower, although the decline has softened.  That is a good sign but I am waiting for the New Highs/Lows to turn higher even if it is a modest turn.  A tick up will be a sign that a bottom is in and the pre-election rally can begin.

The Dow's upward resistance is 12,800, the NASDAQ is looking at 2488, and the S&P is looking at 1400.  If we decide to turn down it will be to retest the SocGen lows but I do not believe that will happen now.  More than likely we will continue to rally slowly for a few weeks in spurts depending on economic data until about a week or so before the next Fed meeting on March 18^th where traders will get nervous about a possible rate cut and move the market lower to push Ben Bernanke's buttons.  The rate cuts have not worked so far in bringing rates down and further cuts will only exacerbate the stagflationary environment which we currently reside. 

Typically a recession starts in an environment of high real rates; not negative real rates which forshadows problems in the upcoming years.  Let's just say I would not want to be the next President.

Looking ahead, this week we get the CPI and FOMC minutes on Wednesday so expect a LOT of volatility.  Further out, March should bring clarity on the Democratic side of the ticket as well as a final rate cut.  At this point the pre-election rally should begin to kick into effect. 

There are some odd technical formations which I will discuss tomorrow in certain commodities along with a bonus cultural post.

Anyone interested in contacting the author of the blog can either send a message through the myspace site or via email at mystockreports@yahoo.com.

Communications are intended solely for informational purposes. Statements made should not be construed as an endorsement, either expressed or implied. This blog and the author is not responsible for typographic errors or other inaccuracies in the content. This blog may not be reproduced without credit or permission from the author.  We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.  This is not intended to be investment advice or a solicitation to purchase any of the securities listed here.  I will not be held liable or responsible for any losses or damages, monetary or otherwise that result from the content of this site.

Comment:  The value in Canadian Oil & Gas Trusts is now beginning to be realized.  I shook my head every day last month waiting for people to catch on knowing that they soon would.  While oil sits trades around $90 dollars a barrel the trusts are providing solid dividends back to investors.

Rainy River is doing well.  Drilling continues on the project and the return so far has been nice.  A possible first mover in a new gold district. 

Same goes for Osisko, who just announced some good drilling results.  It appears they have found another gold vein on the property.  If the stock gets down to the $5.50-5.60 range I will be a buyer.  They are expected to update their 43-101 in the coming months and have been acquiring mining equipment as well.  You need to read their reports.  This is a very well managed company.

Anyone interested in contacting the author of the blog can either send a message through the myspace site or via email at mystockreports@yahoo.com.

Communications are intended solely for informational purposes. Statements made should not be construed as an endorsement, either expressed or implied. This blog and the author is not responsible for typographic errors or other inaccuracies in the content. This blog may not be reproduced without credit or permission from the author.  We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.  This is not intended to be investment advice or a solicitation to purchase any of the securities listed here.  I will not be held liable or responsible for any losses or damages, monetary or otherwise that result from the content of this site.