Perfect Storm? Or perfect contrarian indicator?
By J.Christoph Amberger
Taipan Group's Dynamic Market Alert
Perfect Storm? Or perfect contrarian indicator?
by J. Christoph Amberger
Intelligence agencies draw conclusions on impending terrorist activity by the rise in terrorist "chatter" -- the increasing frequency of suspect phone calls and e-mail exchanges among monitored suspects. I've frequently thought that a similar warning system could be developed by monitoring the frequency and stridence of hard-money editors and commentators; only that their excited chatter about bubbles bursting and dollars declining is a pretty good indication that the stock market is about to set new records.
I recently stumbled upon a flyer put out by a newsletter I have been familiar with for decades now. It says it has been alerting "wealth hunters" to coming economic disasters "months, even years in advance." It warned about the stock market bust of 2000-2002 a full year in advance. And then against the housing market collapse in 2004 two years before it happened.
Technically, I can't really recall a year that they hadn’t warned about a looming market collapse... nonstop since 1987. (In fact, the only year they turned bullish on stocks was right before the tech bubble popped.)
I've found their prognosis to be as close to a contrarian indicator as it gets. So I wasn't surprised that in this week's chatter of tipping points and Bernanke and dollar decline, the Dow Jones Industrial index and the S&P500 set new all-time records as mega-retailers reported better-than-forecast sales, and energy, industrial and commodities producers soared. In fact, it was one of the rare days when all industries groups in the S&P 500 and all 30 companies in the Dow rose.
Commerce Department forecasts for second-quarter economic growth were raised as U.S. exports climbed to a record $132 billion.
If history is any guide, we're heading to fresh new records in U.S. equity valuations. If you're looking at the markets as a means of adding to your net worth (rather than as a linchpin for elaborate causal daisy chains of what might happen), I recommend you make hay when the sun is shining. That's what bull markets are there for.
If you're not quite sure what stock you want to use to earn some capital gains as the markets move up, up and up again, I recommend you read Ian Cooper's latest special research report. We have uploaded it to our network portal at TaipanFinancialNews.com. Simply follow this link to your free report.
Quote of the Day
“There’s a heat wave in L.A. and all across the country. Some say global warming; some say that other mysterious phenomenon -- summer.”
- Colin Ferguson, July 11, 007
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