This Week in Barrons - 9-30-12

This Week in Barrons – 9-30-2012

“Can we change back – I don’t know – I think it’s harder!” … Dialogue from the movie Pleasantville

I’ve been termed: “Mr. Doom ‘n Gloom” – a person who always views the glass as being half empty.  I’m really not.  I just haven’t found a way (yet) to make financial frauds, manipulations, and $100 Trillion in debt sound “fun and upbeat.”  We've seen the U.S. – the greatest economic machine in history, turn into the most indebted nation in history – all within our lifetime.  And thanks to PM for the following video: http://www.youtube.com/watch?v=3EZQvSCGaJI&feature=youtube_gdata_player

This past spring, we made some predictions:

-        The ECB would become more like a regular Central Bank, begin to print money that would end up not being sterilized.

-       The German Court would go along with the ESM.

-       And The Ben Bernanke would give us more "QE".

All of the above came true, and The Ben Bernanke even went well “above and beyond" our expectations.

My logical next step was that the market would eventually push higher.  The game being played here is that by keeping rates at ridiculously low levels, Governments, Pension and Insurance plans are being forced to seek better returns.  Nobody wants to invest in bonds paying 1.5%, when inflation is multiples higher.  The Ben Bernanke knows that if he keeps the rates low, it forces big players into stocks.  Then by adding another $40 Billion a month to buy mortgage backed securities, he's basically handing the banks "free money" to go splurge.  What will the banks do with it (given they don’t want to LEND it) – it will find its way into risk assets.

I think we'll get pull backs (like we saw this week), that could blossom into 300 to 500 point drops.  But I also think that the Fed and Obama (with his Plunge Patrol Team (PPT)) are so desperate, that they'll actually go in and buy stocks if they have to.  The Ben Bernanke knows that his knowledge of the Great depression (and how to fight one) has failed thus far, and he's getting anxious viewing the Global economy fold up on HIS watch.

It’s currently fraud versus fundamentals.  In the long run the fundamentals win and we will indeed crash, but in the short run (the next several months) The Ben Bernanke and Obama should be able to create the illusion of prosperity.

The Market:

2^nd Quarter GDP (the growth rate of our country’s output) was announced as 1.245% - downright awful!  Estimates for 3^rd Quarter are moving toward 0.9%, 4^th Quarter rumblings of 0.4%, - and yes – more and more rumblings of a recession in 2013.  Durable goods orders came in just as “horrible”, and once again housing was down.  Everyone's feeling a bit scared.  The Ben Bernanke announced QE to infinity and yet the market has done nothing but trade sideways and down.  The “Talking Heads” are out in force, some saying that it's over – QE won't save us – we’re doomed, and others suggesting that this is just the pause that refreshes, and we're going up.  One gent on CNBC suggested that we should load up the truck with stocks and get on board, because this is the single greatest moment in history, and 2013 will be the best year we've ever seen.  “I’ll have what he’s having!” :)

Honestly when The Ben Bernanke announced the forever QE, I did not rush to change my asset allocation (i.e. put more money to work).  I did not load the boat with "trades" in the short-term account.  I had a hunch that Wall Street would do what it always does – suck people in, take their money, and when everyone's disgusted – ramp up again.  I thought we would have a 5% pull back – and we’re not there yet.   

But I do indeed think we've got one last spurt left.  Not because of fundamentals (faked), or earnings (which are artificially inflated), but simply because all of the rules have now been broken.  There is no fiscal sanity.  If it takes $80 Billion a month to keep the markets up, so be it.  If that's not enough, this administration will do $100B, because the supply is endless.  This administration had two choices: (a) let the economy crash and pick up the pieces, or (b) continue these massive monetary injections, until the economy dies from overdose.  Understand, “Politicians always pick Overdose.”

We’re about to enter earnings season:

-       Corporate earnings will be very bad,

-       Insiders are selling in volumes not seen in years,

-       Mutual funds are seeing massive outflows,

-       The Michigan Consumer Sentiment Index missed expectations,

-       The Chicago Purchasing Managers Index came in at 2009 lows,

-       The Baltic Dry Shipping Index is in the toilet (worst numbers in years), and

-       The Transport Index never confirmed the big DOW move – why – because no one is shipping anything!

The Ben Bernanke and Obama both know this.  Their real job (right now) is to counter all that selling by forcing the banks to pick up the pace of buying in order to keep the market up.  This should work in the short term.  So, trading-wise – I am biding my time.  I've taken the exploratory trade now and then, but I’m playing light.  I think that (at some point) we will see one of those ‘no news, no reason’ runs higher.  I want to catch that run and escape with the winnings.  On a side note, the Obama administration says they ‘found’ an additional 400K+ jobs they hadn't seen before.  I’m betting that the Obama administration also ‘finds’ the unemployment rate going below 8% right ahead of this election (despite it being a lie). 

I believe that the only reason that the run higher hasn’t started is due to Israel versus Iran, and that’s a true wild card.  Israel has a terrible choice to make.  Does Israel attack Iran now (ahead of the election), knowing it will force Obama to come to their aid, or wait to see if Romney wins – who’s already said that he would help Israel out.  If Israel were to stage an offensive, and even if we were to jump in and help, Iran can inflict damage that would cripple the entire world.  Iran could torch oil fields and create hazards in shipping oil lanes.  People are suffering now with $3.80 gasoline, a spike to $4.75 would halt them in their tracks.  I really do believe that the only reason the banks haven't started their buying binge of stocks is because of the very real possibility that Israel says “GO” and the attack (and corresponding market collapse) happens.

This is simply a war between a world that's in trouble and facing a deep recession, and the fiat money printers.  Nothing could be more basic, but the answer on a daily basis isn't clear.  I'm still in the camp that says in the short run, the Central banks can inject so much money into the system that it "has" to go somewhere and it will end up in the market.  But because it’s truly a war, we're getting some real chop and slop here.  

In any event, I’m keeping my powder dry for now.  I feel that a last hurrah run is out there; I just don't know when it will start.  When the world believes that Israel is holding true on waiting until after the election, then that would be the green light for stocks to go wild.

Tips:

I stopped out of SPY last week for a $3 gain. SUBX for a $2 gain, NTAP for even, MNST for $1, and BRCM for even.

As DS suggested – I’m going to review the defense sector closely.  I could be too late, but there must be charts of defense contractors – that will truly suffer if Mr. Obama is re-elected. 

Currently I’m holding:

-       GDX – in at 42.50 (currently 53.59) – stop at 52.80

-       LOW – in at 28.02 (currently 30.24) – stop at entry

-       MRO – in at 28.13 (currently 29.55) – stop at 28.80

-       IBM – in at 198.34 (currently 206.59) – stop at 204.00

-       GLD (ETF for Gold) – in at 158.28, (currently 171.84) – no stop ($1,771.10 per physical ounce), AND

-       SLV (ETF for Silver) – in at 28.3 (currently 33.40) – no stop ($34.52 per physical ounce).

To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm. 

Please be safe out there! 

Disclaimer:

Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, RF Culbertson, contributing sources and those he interviews.  You can learn more and get your free subscription by visiting: <http://rfcfinancialnews.blogspot.com> .

Please write to <rfc@getabby.com> to inform me of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference .

If you'd like to view RF's actual stock trades - and see more of my thoughts - please feel free to sign up as a Twitter follower -  "taylorpamm" is my handle.

If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing: http://www.youtube.com/watch?v=K2Z9I_6ciH0

To unsubscribe please refer to the bottom of the email.

Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations.  Mr. Culbertson and related parties are not registered and licensed brokers.  This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document.  Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article.

Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE 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.

Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.

Remember the Blog: <http://rfcfinancialnews.blogspot.com/>
Until next week – be safe.

R.F. Culbertson

<mailto:rfc@getabby.com>

<http://rfcfinancialnews.blogspot.com>

This Week in Barrons - 9.23.12

This Week in Barrons – 9-23-2012

What time is it – on Obama’s Watch?

"We don't pay taxes, only little people pay taxes." …Leona Helmsley

"It's a racket, those stock market guys are crooked." …Al Capone

"I simply do not know where the money is." …Jon Corzine

This week the SEC ruled that Goldman Sachs would receive no penalty for its role in the mortgage meltdown.  It didn't matter that they were selling their clients securities and then shorting those same securities because they were "junk".  It didn't matter that they were appraising things fraudulently, or that they were involved with robo-signings.  On Obama’s Watch, “When you're too big to fail, you're too big to jail.”

JP Morgan is currently shorting over 135M ounces of silver.  That's about 28% of the entire Silver market.  Regulators don't seem to think that this gives them an ability to influence the price of silver!  And with the top 4 silver players in the market controlling one half of the entire market – regulators contend that there is no collusion, ganging-up, or backdoor deals.

For as long as I can remember, it has been known that if you're big and powerful, you fall under a different set of laws.  Can JPM short half the world’s production of silver, and no one see a problem with it?  Can Maxine Waters call the Fed, and get $12M out of them to support a bank that her husband just happens to run, and no one finds an “ethics” problem with it"  How is this happening on Obama’s Watch!

Remember the flash crash?  Well, it seems that if you PAY the NYSE – they will supply you with market moving data AHEAD of what goes to the consolidated feeds that the rest of the trading floor gets.  It seems that the investing public gets investing data in about 3.7 seconds.  If you are a proprietary trading desk PAYING the fees – you get the data in 2 Milliseconds – virtually a life time (and tens of millions of trading shares) ahead of the investing public.  This shows (without a doubt) market manipulation and fraud.  Yet NO ONE goes to jail on Obama’s Watch.

Why do I buy gold?  When I started buying gold I was laughed at.  People wrote me and told me that it was “dead money”.   Gold has no counter party attachment, because there's no interest or derivatives against it.  While the crooks (the JPM’s, the NYSE’s, and the Obama Regulators) can:

-       manipulate the prices of stocks, and bonds,

-       co-mingle your funds with their trading desks,

-       devalue the dollar,

-       artificially hold interest rates low,

they cannot do a single thing to the gold coin sitting on my desk.

Every week we learn more of the rules:

-       Since we know oil isn't going up due to demand, we can work with that.

-       Since we know the value of the dollar is being systematically lowered, we can work with that.

-       Since we know that QE “To infinity and beyond…” does nothing for the economy, and only bails out criminal banksters, we can work with that.

-       And since we know that no one cares about the rigging of the most important financial benchmark on the planet – LIBOR, we can even work with that!

On Obama’s Watch why do we use the U3 measure of unemployment, instead of U6 that we used during the Reagan years.  The reason is simple: under U3 the unemployment rate is 8.1%; however, under U6 (that we used for decades) the rate is over 15% (and no President is getting re-elected with a 15% unemployment rate!)

Last week, on Obama’s Watch, more people were admitted to the Social Security disability program – than got jobs. 

The stock market isn't up because the economy is better.  The market is up because The Ben Bernanke has decided to print more and more money out of thin air.  That money goes to the banks, and the banks use it to buy risk assets (stocks).  This will end badly – with an economic melt down, hyper-inflation, and massive unemployment.  As they say in the movie ‘Taken’: “Good Luck!”

The Market:

We’re stuck in a rut and drifting lifelessly.  Is that the way our market is supposed to behave after the European and Federal Reserve announcements?  Many people would say no; however, the market is not here to make YOU rich, it’s here to make THEM rich.  Everyone knew that the Fed's printing of $40B a month would result in investors wanting to get back into the stock market.  So during the week the market did what criminals do – invite investors in, and then (via sector rotations) take their money away.   

I have repeatedly stated that I fully expect this market to drop by 50%, but when is the key.  Will The Ben Bernanke's open-ended buying spree be enough to put off or delay the crash for another year or two?  Logic says:

-       With the Baltic dry index scraping the 2008 lows (showing that companies are NOT shipping product),

-       With company after company warning that the global recession is in full force and hurting earnings, and

-       With unemployment still absurdly high – this market has run out of gas.

But (in the short run) fraud always trumps logic.  The Ben Bernanke has told us that he's gone "all in", and is starting with $40B a month, and that could turn into $100B in a matter of months.  All of the rules, modesty, and fiscal sanity are gone.  By taking the Fed's balance sheet from $3T to $5T, the chances of a true market crash are unlikely in the short run.  Think of it like this: If someone gave you ‘free money’, and you (and your friends) could manipulate a stock to go from $50 to $300 a share – you’d be a fool not to invest in that stock – yes?  And since the economy won't get better, and unemployment won't fall, The Ben Bernanke has little choice but to continue pumping in billions.  This all ends with a situation where inflation causes it all to implode upon itself.  In the meantime, we’re all going to be living thru a period of worsening economic activity, all the while accumulating risk assets (stocks).  With that in mind, the thought of a short-term market slide of 30% or more just doesn't seem likely.

Since the old highs are so formidable, it's going to take a bit of base building here before we can muster the attack on them.  But my guess is that this market will be higher into year-end than lower.

Tips:

I stopped out of NTAP last week for a $1 gain.

Currently I’m holding:

-       GDX – in at 42.50 (currently 54.82) – stop at 52.80

-       SPY – in at 142.54 (currently 145.99) – stop at 144.50

-       SBUX in at 48.88 (currently 51.10) – stop at 50.60

-       LOW – in at 28.02 (currently 30.25) – stop at entry

-       MRO – in at 28.13 (currently 30.73) – stop at 28.80

-       NTAP – in at 35.13 (currently 35.81) – stop at entry

-       IBM – in at 198.34 (currently 205.99) – stop at 203.00

-       MNST – in at 53.80 (currently 54.23) – stop at 54.20

-       BRCM – in at 36.80 (currently 36.42) – stop at 36.30

-       GLD (ETF for Gold) – in at 158.28, (currently 171.94) – no stop ($1,775.60 per physical ounce), AND

-       SLV (ETF for Silver) – in at 28.3 (currently 33.45) – no stop ($34.57 per physical ounce).

To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm. 

Please be safe out there! 

Disclaimer:

Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, RF Culbertson, contributing sources and those he interviews.  You can learn more and get your free subscription by visiting: <http://rfcfinancialnews.blogspot.com> .

Please write to <rfc@getabby.com> to inform me of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference .

If you'd like to view RF's actual stock trades - and see more of my thoughts - please feel free to sign up as a Twitter follower -  "taylorpamm" is my handle.

If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing: http://www.youtube.com/watch?v=K2Z9I_6ciH0

To unsubscribe please refer to the bottom of the email.

Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations.  Mr. Culbertson and related parties are not registered and licensed brokers.  This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document.  Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article.

Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE 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.

Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.

Remember the Blog: <http://rfcfinancialnews.blogspot.com/>
Until next week – be safe.

R.F. Culbertson

<mailto:rfc@getabby.com>

<http://rfcfinancialnews.blogspot.com>

This Week in Barrons 9-16-2012

This Week in Barrons – 9-16-2012

“I Hope this was a Plan that just Came Together.” … Almost A-Team

This week – one by one – the pieces of the puzzle were manipulated into place and the picture emerged.  It started with Mario Draghi saying he would do "What ever it takes" to keep the Euro together.  Then the German courts stepped up to give their blessing by voting yes to the ESM.  Finally The Ben Bernanke exceeded all expectations by saying that he’d print another $40 Billion a month (focusing on the housing market), and will do even more if the economy doesn't improve!

A while back I posted a study showing that 50% of the market’s gains have come within 2 days of an FOMC meeting and announcement.  So factually – remove about 20 days a year – and you remove 50% of the market’s gains.  With the DOW sitting about 600 points from its all time high – you need to ask yourself – is this a true reflection of the economy?  After all:

-        jobs stink,

-        47 million people are on food stamps,

-        inflation is roaring,

-        CD's are paying 3/4 of a percent,

-        economic activity is below sluggish (basically in recession),

-        and yet we are nearing ALL TIME highs in the stock market.

This shows that the stock market has little to do with the economy, and the market’s movement has nothing to do with fundamentals.  For example: on the very same day that 384K people signed up for initial jobless benefits (1^st time unemployment), which should have sent the market down – we roared higher for 200+ points due to ‘free money’ from the Fed.   

What you saw was the: “We’re All In” roll of the dice.  Between the ECB in Europe, the FOMC in the U.S., and the stimulus/infrastructure spending in China, the world is going to be blanketed in cash.  And when The Ben Bernanke was asked about inflation he said: “Food is soaring because of the drought, and oil is soaring because of global events and demand.”  Sorry, materials are soaring because our Fed is purposefully destroying whatever infinitesimally small value the dollar has.  Companies will correspondingly want more dollars for their products because dollars are going to be worth less as the days go on – and the spiral begins.

So what happens now?  The answer to that question isn’t as simple as it was a month ago.  On one hand you could think that the markets and the economy would continue higher, but since none of this currency printing addresses the structural issues (along with the overwhelming debt) it will all come to a head in the near future when we will crash again.  BUT – never in the history of the world have Central Bankers been able to coordinate massive money printing like they can now.  That is a game changer.  Consider the number of times that you have heard that the “Fed is out of bullets”, and “There’s not much left that the Fed can do”.  What do you mean the Fed is out of bullets?  The Fed (like Europe and China) has become a gigantic printing press, that can print as much currency as they want, and are therefore NEVER out of bullets.  We’ve entered an Economic Twilight Zone where ALL of the old rules are out the window. 

In the past (think Weimar Germany and Argentina), if a Country printed money, their currency became worthless on the global stage, and eventually it would implode upon itself and go belly up.  But, what happens if the entire globe starts running the printing presses wide open?  In the end, the entire world defaults, the currency markets would shut down, and a Global "reset" would be announced, along with a new global currency installed.  But until that time, anything and everything is possible.  Until then, all any of us can do is continue with our precious metals, work the equity markets to our advantage, and transform as many dollar gains into “material holdings” as we can.  We've entered a very strange time for sure, and I can think of no other thing to do.

The Market...

Over the past days I’ve received many congratulatory e-mails concerning my QE3 prediction – and to that end I say thank you.  This week we came into the FOMC meeting with some long side trades, but we surely were not loaded to capacity. There was the uncertainty that The Ben Bernanke could disappoint, so we kept some powder dry for another day. 

The Fed then announced their detailed plans, and the Europeans will surely follow.   Since markets don't function on fundamentals any more, and banks really don't want to lend money any more, the money has to go somewhere.  Will the banks channel these new funds into Bonds?  Doubtful – because why buy bonds that pay 1.5% interest, when they can run with the market and make billions?  It’s my feeling that a large portion of this money will work its way into the stock market.  

I disagree with the Fed’s decision to continue quantitative easing.  Quantitative easing is basically printing money to decrease the rate on yield-bearing assets.  As the Fed purchases these assets, the yield on these assets decreases which (hopefully) trickles through the economy allowing businesses and individuals to take out credit at favorable rates.  The Fed then hopes that businesses and individuals will increase borrowing and consumption.  This works if money actually moves within the economy.  But, if individuals are not interested in purchasing a home (for example), or can’t get a mortgage (due to stringent lending requirements), or businesses are not seeking to invest – then cheaper money doesn’t matter.  A measurement of how money is actually moving in the economy is called the “Velocity” of money.  Factually, the ‘Velocity’ has DECREASED by 25% (and is continuing to decrease) since 2008.  So no matter how you examine it – money simply isn't moving as quickly as it needs to within the U.S. economy.  This decrease in velocity signals that the current QE program is not going to fix the current economic situation.

Now market-wise – the market is not a voting machine in which the masses decide the winners and losers, but rather it is a weighting machine in which the quantity of money is the sole arbiter of price.  The market has cheered all of the QE programs announced by the Federal Reserve, despite their failure to significantly generate jobs or promote growth.  For this reason, I am long the market as I would rather be upset about the monetary situation of the nation and making money, than upset and losing money.  

My guess is that we are going to challenge the 2007 all time highs, and I suspect there's a good chance we actually break above them.  The only issue is that markets often inflict the most pain before they allow reward.  What would prevent the markets from pulling a fast 5% pull back to confuse people, and then turn around and push toward the upper limit?  Nothing at all.  In fact, it's the way Wall Street works.  Therefore, don't be surprised if we see some weakness, simply because it's designed to confuse you and shake your confidence.  Moving ahead we'll be looking to add on dips – instead of chasing things higher.  We think the pump is primed, and Bernanke loves a rising market.

As an aside:  if the political polls in early October show the President behind Romney in key swing states like Ohio and especially Florida, a desperate President Obama may try to turn things around by doing what only a President can do.  He could order an attack on Iran, or co-ordinate an attack with Israel.  The election would suddenly then be about the war.  The President's spin-artists would try to make the November 6^th vote a referendum pitting a businessman and his budget-geek running mate – against the Commander-in-Chief who killed Bin Laden and took out Iran's nukes.  So don't be surprised if one morning in the not-too-distant future you see pictures of smoke pouring from (what used to be) Iran's nuclear factories.

Tips:

In general terms the inflationary areas like oil and materials are the ones that run the best when the printing presses are running.  But that old adage could crack some, because the bankers now know that it's really not about fundamentals and inflation any more – so other areas such as technology and financials could also be big winners going forward.  In terms of what within each of the sectors do I like:

-       GLD (Gold ETF) is an old favorite of mine – I prefer the physical metal – but I like the trade none the less – you will get resistance in the mid 170’s – but if/when it breaks free …

-       SLV  (Silver ETF) is also a favorite (like the physical metal as well) – resistance will be in the mid to high 30’s – but all time high is near 50 – so room to run there.

-       GDX / and GDXJ (Miner and Junior Miner ETF’s) – extremely beaten down sector – but play with caution.

Thanks to DS for other materials selections such as SLX (Steel) and USO (Oil) – both interesting and can easily do well in inflationary times.

Currently I’m holding:

-       GDX – in at 42.50 (currently 53.87) – stop at 52.00

-       SPY – in at 142.54 (currently 146.97) – stop at 144.50

-       SBUX in at 48.88 (currently 50.53) – stop at 50.10

-       LOW – in at 28.02 (currently 29.28) – stop at entry

-       MRO – in at 28.13 (currently 31.09) – stop at entry

-       NTAP – in at 35.13 (currently 35.81) – stop at entry

-       IBM – in at 198.34 (currently 206.81) – stop at 203.00

-       GLD (ETF for Gold) – in at 158.28, (currently 171.87) – no stop ($1,769.80 per physical ounce), AND

-       SLV (ETF for Silver) – in at 28.3 (currently 33.59) – no stop ($34.60 per physical ounce).

To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm. 

Please be safe out there! 

Disclaimer:

Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, RF Culbertson, contributing sources and those he interviews.  You can learn more and get your free subscription by visiting: <http://rfcfinancialnews.blogspot.com> .

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Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations.  Mr. Culbertson and related parties are not registered and licensed brokers.  This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document.  Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article.

Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE 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.

Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.

Remember the Blog: <http://rfcfinancialnews.blogspot.com/>
Until next week – be safe.

R.F. Culbertson

<mailto:rfc@getabby.com>

<http://rfcfinancialnews.blogspot.com>