This Week in Barrons - 2-10-2013

This Week in Barrons – 2-10-2013

The Year of the Snake:

On Saturday, China welcomed the arrival of the Year of the Snake with firecrackers, fireworks and a blaze of good fortune.  The Chinese zodiac (which repeats every 12 years), has deep spiritual meaning for the hundreds of millions that live in the East.  In fact, families will plan weddings and even births around the mystical powers of the various creatures that symbolize their astrology. 



The "age" that just passed was that of the dragon.  The dragon is often thought of as lucky, but the snake is very, very different.  In the past, the “year” of the Snake has contained:

-       The 1929 stock-market crash,

-       The Japanese attack on Pearl Harbor,

-       The killing of over 3,000 students in China's Tiananmen Square,

-       And the September 11^th bombing of the World Trade Towers.

Singapore's Grand Master Tan Khoon Yong of Way OnNet Group said: "This is a disaster year.  A lot of things will not go smoothly.  The Euro may be in trouble, and the European Union itself may be threatened by division as soon as May.”



Hong Kong astrologer Chow Hon-Ming sees a disharmonious May causing an ongoing dispute between Japan and China possibly escalating into a brief war, as the two snakes are going to clash.  "May is known as the snake month.  And since it’s the Year of the Snake, between May 5 and June 6, these two snakes will meet and possibly go to war.”

It seems Snake years are marked by major, transformational change.  But can we really place any credence on some astrological sign?  I'd say the chances are pretty good.  If you take a quick glance at the world and sheer lunacy that is developing, it would be hard to NOT imagine something ugly coming this way.  In the past several weeks:

-       Venezuela (an oil-producing nation) announced the devaluation of their currency by 46% overnight.

-       Japan announced an end to 20+ years of deflation, and have targeted 2% inflation as their goal.  To get there, they must print trillions of yen, which devalues the yen - just like Venezuela.

-       US car companies (especially ‘Government Motors’) will require further currency devaluation – in order to keep pace with Japan’s devaluations and Toyota’s price decreases.  This should really heat up the ‘race for the currency bottom.’

-       Evidence is growing that assets are being pledged as collateral – 50 or more times – for the exact same asset.  Remember the housing crisis of 2008?

-       Germany has decided to give the world 7 years to actually produce and deliver it’s ‘gold’.  Why 7 years?  Because they know that the world doesn’t have it.  Germany is being nice and letting the Central Banks save face, instead of panicking the world.

So could 2013 usher in a bad upheaval (or two) in Euro land?  I'd be awfully surprised if it didn't.  The year of the Snake is described as cunning, sly, and mischievous.  And, when I look and see where the markets are, and think about the real world situation, it is almost a "given" that something is going to go really wrong.

With all the Central Banks printing money, and using every scheme imaginable to inject money into the US system without causing too much inflation, I’m surprised that more countries haven’t grown tired of the US.  Like China, Russia, and now Venezuela – there is going to be a renewed "currency war" and the first shots have already been fired.  If you remember back to the discussion we just had about the "velocity" of money, you realize that at some point – a huge percentage of that cash is going to rush forth, flood the system, and deliver hyperinflation.  Might 2013 be that year? 



So how do we deal with all of this?  One thing we know is that the market has doubled from its lows due to rampant money printing.  And as long as The Ben Bernanke keeps shoveling $85 Billion a month to the banks, the market has to continue up.  That money must go somewhere and it usually ends up in the markets.  So leaning long isn’t a bad strategy – just know that when the end comes, it could unravel quickly depending on which string is ‘pulled’.  In other words, if the end is simply monetary velocity picking up steam; then we will have time to back away.  If however, something more urgent happens, then that could cause an immediate market crash.

When the market tops out (whether that is at DOW 14,500 or 16,000), we will need to "short" the resulting down trend.  I remember when tech stocks of the 90’s were gaining $20 every day; the best position to take was shorting the market.  Put options were gaining thousands of percent.  It is my thinking that the lion’s share of the gains will (once again) be on the "way down" from whatever peak we set. 
With that in mind, if you don't understand put options, or if you don't know how to short a stock – please go learn.  It’s not complicated, and I can make the argument it's much safer than being long.  In 2000, over 250 stocks that traded over $200 per share went to $1 or less over a short period of time.

In terms of metals, don’t be misled by platinum and palladium.  Both platinum and palladium have made spectacular gains lately, but they are not flying higher due to money printing.  They are going higher because of the demand for new cars.  Manufacturers need platinum and palladium to use in the catalytic converters.  Moreover, with some of the political unrest in the mining countries, a lot of platinum and palladium production is off line, producing a scarcity in times of high demand.  Both of these metals will come back down when demand stalls.  I view gold and silver as a hedge against global troubles, currency wars, and hyperinflation.  You can certainly trade platinum and palladium – just don’t own them (as you would gold and silver) as your wealth / currency / inflation hedge.

Yes, 2013 is the year of the Snake.  Please tread carefully, and watch where you step – because snakebites really hurt!

The Market:

Lately, we’re seeing market chop, and lots of it.  We came into February with a triple digit DOW gain – then on Monday we gave it back – and then Tuesday it swung the other way again.  On Wednesday, Thursday and Friday we sort of ran in place.  All in all, despite all the big swings, the market is pretty much flat on the week.

When you look at a chart of the DJI (the Dow Jones Industrials), you will see 6 sessions where the market went "sideways".  That won't last forever.  We are going to either dramatically ‘springboard’ higher or sharply ‘roll-over’ lower.  As much as the evidence would point to a pull down, the way the market has defended every dip suggests that they're just building a base for another push higher.  And that push will take us up to challenge the all time highs.  Yes we're still overbought.  Yes some high-profile investors have made some huge bets on the VXX going higher.  [The VXX is a volatility index that normally goes higher in times of distress and markets falling.]  But that said each intraday dip has been brought-up and ended well off it’s lows by the close of trading.  It looks like they want more.

A sideways chop often portends the end of the recent trend; so the best play (this week) has been "not to play".  Keep your powder dry, and don't overextend.  In these times you wait on the market to make its next move, and then go.  It’s difficult to watch the market come roaring out of the morning gate, and not jump on board for the ride.  Unfortunately morning rushes have been brought back down, and morning dips have been brought back up.  Lately, being long or short for more than a day has been trouble.  So we wait.  

If we see the DOW put in two daily closes over 14,025 I have to assume they're willing to push this higher.  Until then, it's a simply a guessing game and I will pass. 



But that doesn't mean we don't see some value here and there.  Lately, I feel that Nokia (NOK) is looking like a decent long-term hold.  They have a lot of cash.  Microsoft is a major ally.  And their main product is an inexpensive phone for the emerging markets.  At $4 a share, we are going to pick some up this week and see what develops.  It’s strictly a speculative play and not for the faint of heart. 



I think we will know the market’s short-term direction by the end of this week.  I think it’s going up from here, but I won't be surprised if I'm wrong and we finally pull back into a correction – because we’re ridiculously overdue for one. 


Tips:

The past week we sold out of ORCL (+$1.50), PAY (+$0.50), and HD (+$4.50). 

Last week I mentioned the 3D printing space and received questions regarding who to buy, and where to enter the trade.  3D printing stocks are exciting, volatile, and potentially life-changing investments.  As early investors you want to be exposed to this sector group, but you don’t want to buy in at the highs.

-       I would look to purchase shares of 3D Systems (DDD) on a pullback – potentially as low as $55.

-       I would look to purchase shares of Stratasys (SSYS) on a pullback – potentially as low as $75.

-       I would look to pull the trigger on Proto Labs (PRLB) immediately as it’s under $44 per share.  PRLB is the most “under-the-radar” of these three plays, which leads to the biggest opportunity.  Their pullback is a confirmed signal and a reason to buy.

-       XONE (the Pittsburgh company) debuted at $25 and immediately ran to $30.  Congrats if any of you were in on it!

My current short-term holds are:

-       SLB – in at 80.02 (currently 78.93) – stop at 77.00

-       KSU – in at 95.03 (currently 94.73) – stop at 94.00

-       SPN – in at 25.09 (currently 26.05) – stop at entry

-       WFT – in at 13.50 (currently 13.17) – stop at 12.70

-       PTEN – in at 19.78 (currently 23.38) – stop at 22.50

-       MS in at 18.50 (currently 23.27) – stop at 22.00

-       SPY in at 141.97 (currently 151.75) – stop at 150.00

-       SIL – in at 24.51 (currently 21.10) – no stop yet

-       GLD (ETF for Gold) – in at 158.28, (currently 161.45) – no stop ($1,666.00 per physical ounce), AND

-       SLV (ETF for Silver) – in at 28.3 (currently 30.43) – no stop ($31.42 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 - 2-3-2013

This Week in Barrons – 2-3-2013

Inflation is Under Control:

This week the market regained its glory by reaching the DOW 14,000 level again. The last time it was this high, was October of 2007 – just weeks before it all imploded and ended with the DOW at the 6,600 level.  But this time, is it different? 



On Friday, Mr. Dick Bove said: “The banks are on the cusp of a 14 year bull market, that could take them as high as levels they reached years ago.”  This came from the very same gentleman that never saw the single greatest economic collapse in 80 years coming.  He now knows that we're in the sweet spot of investing.  Somebody pinch me.

Most people compare the stock market with the health of the economy.  Unfortunately, the stock market has very little to do with the economy, and (in the last 20 years) has had little to do with the health of the businesses that trade on it.   But when the market goes up, people point to it and say: "See the economy is doing fine, look at the market".  This is a mistake.  IF a rising stock market were the indication of a strong economy, then one should ask – “What country’s stock market has produced the best returns over the past 8 years?”  The answer would be the small, African country of Zimbabwe.  But, take a look at the following picture please:

 


 

This past holiday season, my sons exchanged GENUINE 10 Trillion dollar Zimbabwe notes, and here is a picture of one.  This is real, legal tender.  And for 10 Trillion Zimbabwe dollars you can purchase:  a shoelace, a pack of gum, 2 eggs, OR a daily newspaper. 
You see, Zimbabwe has inflated their money supply (printed more money out of thin air), so badly that inflation has surged to levels not generally seen in a modern economy – leaving the 10 Trillion dollar bill to be worth about 11 cents.  According to our own U.S. Government’s website:  $1 in 1916 is now worth about 6 cents.  Prices have risen over 1916, given a pound of bacon is now $7, butter is about $4.50, and coffee is between $9 and $11.  Wages have also risen.  However, in 1916 we normally paid 3% of our wages to taxes, medical, etc. – and today we’re over 40%.  All of that aside, we know that inflation exists.  Energy, medical, food, insurance, and education are all going up between 9 and 12% per year.  Combine that with The Ben Bernanke printing $85 Billion a month – how long until we have our own $10 Trillion note? 

There are many components to an economy, and one of those most misunderstood and forgotten is the "velocity" of money.  Velocity is simply how fast the money goes from person to person to person.  For example: I print a million dollars out of thin air, and hand it to George.  If George locks this money in a safe and does NOT spend it – there will be absolutely NO inflationary pressure.  The butcher, baker, cabinetmaker did not see an influx of orders – because George just sat on the money.  On the other hand, I print another million dollars out of thin air, and hand it to Mary.  Mary rushes out and purchases: 4 new cars, 20 new outfits, a new pool, etc.  If those merchants feel that even more orders are coming, they're going to take their new money and rush out and purchase even more items.  The "Velocity" (because of Mary) is high.  And when a lot of money starts chasing goods and services quickly, the goods and services go up in price.

Currently, price inflation is bad, but not yet hyper.  Maria Bartaromo (on CNBC) constantly speaks of “All the money on the sidelines.”  How many people have held off buying stuff because they are still worried about the economy?  How many businesses are holding back because of uncertainty?  How many banks are not loaning because they're still repairing their damaged balance sheets?  Bernanke's billions are making it into small pockets of the economy such as the stock market, and some defense and energy companies, but the bulk of the money has NOT been spent, yet.

At some point the spending will start, and all of that saved cash and demand for loans will come full circle.  That is when we'll start to feel the real hyper inflationary effect of all this bogus money that has been printed.  That is when the Treasury will have to start printing $10,000 dollar bills again.  That is when we start seeing bread at $7, milk at $10, and gasoline at $8.  Currently corporations are sitting on trillions of dollars they don't want to spend for fear of: Obamacare, taxes, etc.   But nothing lasts forever, and this hoarding won't either.  There's going to be a time when it rushes forth, and history shows that it usually comes in a big wave, not a slow trickle.

Therefore, the stock market has NO connection to the economy.  The stock market is being pushed by free money printing, and there's going to come a time when all that cash floods the economy.  At that time we will see a huge pick up in economic activity, prices will soar and then become "hyper".  When that happens, the economy will suddenly contract again, as everyone gets tired of chasing prices and stops buying.  However, until that happens – there’s no reason the market can't hit 15K or even 16K.  Gold and silver are in a holding pattern right now for the same reason that the inflation rate isn't insane just yet.  The velocity of money is subdued, and the two "anti inflation" metals are sitting where they're comfortable given the inflation we have.  When the money spills out of the safes and mattresses, then inflation will soar, and so will gold and silver.  Take advantage of their low prices now, or chase them later.

The Market:

We talked in August about a rally into year-end and having the “January effect” push up to challenge 5-year highs.  I’m always surprised when a plan actually comes together.  The market is just running wild on Bernanke bucks.  The market has run so hard that everyone looking for a pull back correction has been frustrated.  The best we have gotten is a "pause", where the market just ended the day flat.  I’m still waiting for that 5% (or deeper) true correction. 

Remember the market's main game is to frustrate and confound as many people as humanly possible.  As soon as enough people pile in because a correction just "won't happen", is when the correction will happen.  If you're "IN" the market, then staying in makes all the sense in the world.  But if you've missed the last couple weeks of this rally, does it make sense to try and jump in now?  Yes and No.  The all time highs are just 170 points away on the DOW.  That’s not much more than two good trading days away.  Are we going to blast past that level, and just continue up?  Yes we should break through the level, not likely that we’ll continue straight up.  There is going to be a correction.  So, if you are NOT in the market, then your best bet is either to wait for the pull back, OR go in lightly – buying low volumes and enforcing tight stops on your trades.

It is hard to envision the market gaining another 6% in February, as it did in January.  So even if it does go up, (in the short term) we should only be looking at a 2% move before it backfills to catch its breath.  Lately there has been some fairly heavy sector rotation, bouncing from tech to pharma, from pharma to materials, from materials to energy and back again.  But each time they buy energy, the energy stocks have moved very quickly higher.  So I’m sitting and waiting on the next round of buying, but I won’t be shy about selling out if the overall market starts to deteriorate.  No individual companies are going to hold up when the overall market gets smacked with a round of profit taking.  Just know that this market is overextended, and way overdue for a quick drop out.  Move quickly if you smell danger.

It is an incredibly fascinating time, and the fun is just beginning.  Over the next couple years you're going to see all manner of goofy things, and one of them could easily be watching the market set new highs, just before it falls 2,000 points.  As the Chinese say: "May you live in interesting times".

Tips:

The past week we sold out of LLTC (even), LNG (even), and NOG (even).  But continue to watch: SPN, WFT, PTEN, and NBR for entry levels – because each time the market concentrates on energy – it moves quite a bit. 

Also the 3D printing space has been on-fire this past year, with companies like Stratasys (SSYS) and 3D Systems (DDD) gaining over 100% per year.  A new 3D printing company (out of Pittsburgh, Pa.) ExOne (XONE) is going public shortly – and we wish them the best.  It’s a speculative space – but as long as the companies can continue to grow between 30 and 35% per year – their stock prices should be very well supported.

My current short-term holds are:

-       ORCL – in at 35.14 (currently 36.23) – stop at entry

-       PAY – in at 34.04 (currently 35.24) – stop at 34.50

-       PTEN – in at 19.78 (currently 20.68) – stop at entry

-       HD – in at 61.53 (currently 67.36) – stop at 66.00

-       MS in at 18.50 (currently 23.47) – stop at 22.00

-       SPY in at 141.97 (currently 151.24) – stop at 149.00

-       SIL – in at 24.51 (currently 21.08) – no stop yet

-       GLD (ETF for Gold) – in at 158.28, (currently 161.45) – no stop ($1,669.40 per physical ounce), AND

-       SLV (ETF for Silver) – in at 28.3 (currently 30.87) – no stop ($31.94 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 - 1-27-13

This Week in Barrons – 1-27-2013

The Untouchables




Do you remember the old TV series starring Elliott Ness as the unstoppable crime fighter – The Untouchables?  This week there was an a lot of buzz concerning a "Front Line" video that emphasized the fact that no high ranking banking officials have been put in jail for the banking (housing) meltdown of 2008 - 09.  Despite hundreds of whistle blowers, and millions of lines of testimony from accountants, the Lords of Wall Street's biggest houses got away without a scratch.  Watch the video below.  It’s about an hour long, but moves quickly and is incredibly well done – showing you exactly (step-by-step) the moves that "blew up" the financial system.  http://www.pbs.org/wgbh/pages/frontline/untouchables/



Speaking of Untouchables:  CFTC (Commodity Futures Trading Commission) commissioner Jill Sommers unexpectedly resigned this week.  On one hand this is great news because she is one of the commissioners that allowed JPM to virtually dictate the silver market.  But also, Ms. Sommers has consistently backed the “too big to fail” banksters, and was prominent in the investigation of John Corzine’s – MF Global melt down.  Ms. Sommers did NOT resign in order to spend more time with her family.  This is all about John Corzine and MF Global.  Some new appointees to that investigation were going to make life very difficult for Ms. Sommers, so she ‘bailed’ before the heat started to rise.

Continuing with The Untouchables:  just days after the above film hit and stirred up so much controversy, President Obama appointed Mary Jo White as the new head of the SEC.  At first glance, you notice that she was a former prosecutor, and Obama made a point of saying just how tough this gal is and how she's going to clean up the Street. 
And what was omitted from Ms. White’s bio was that after her role as ‘prosecutor’, her most recent role was in the private sector DEFENDING Wall Street kingpins.  That part must have slipped people’s minds.  The New York Times noted that Ms. White “has defended some of Wall Street's biggest names, including Kenneth D. Lewis, a former head of Bank of America."  But not many know that she also was deeply involved in an SEC scandal involving Morgan Stanley’s CEO John Mack.  She also prevented Mr. Gary Agguire, (a ‘foot soldier’ in the SEC who was trying to investigate John Mack for fraud, corruption, and insider trading) from doing his job and ultimately got him FIRED.  Once again, we have yet another fox guarding yet another hen house.   


So in the course of one week we've gotten a very damaging video about the callousness of Wall Street and the impotency of our Government officials.  We've had Ms. Sommers, a commissioner that's knee deep in the John Corzine / MF Global scandal resign unexpectedly, after two new commission appointees were noted as possibly making life tough for her and that investigation.  And we have Ms. White, the new head of the SEC who was billed as someone who will save us from the Wall Street crooks, but who made the bulk of her money DEFENDING those same Wall Street crooks. 



Often I need to go to a movie to see a script like this.  In my opinion the fraud now is worse than it was back then.  As we enter the ‘get all you can, while you can’ phase of the economy – I’m wondering where Elliott Ness is when we need him.  

The Market:

Do you remember the old Fifth Dimension song: “Up, Up and Away”?  The market has been on a tear for the month of January and it doesn't appear like it's over.  I've said that I felt that this market would ultimately attack the all time highs set in November of 2007, and we're well on our way there.  The part that I missed was thinking that when we got to the recent highs, we would take a pause, back up a bit, and regroup.  That didn't happen.  We just powered up. 



Well now things get a bit dicey. Yes I still believe we ultimately challenge and then set all new highs on the DOW and S&P.  The printing presses are cranked up all around the world, and that money always finds its way to the markets.  But we have been up 10 days out of 11.  The S&P is on a track to set a 7-year streak.  Despite the money printing and the celebrations, we are terribly overdue for a pause. 



If we do see a profit-taking spell this next week – I don't believe it will be a big dip. I would be surprised if it were more than just a small percentage drop.  In fact, I think the dip would be buyable.  But because we feel a ‘dip’ is lurking, it makes it harder to dive in and just buy-buy-buy.  



We are not far from the all time highs.  In fact the DOW is less than 300 points away.  The Central bank liquidity has to go somewhere, and right now it's going into stocks.  As we approach the new high, I would suspect that we will see some ‘fits and starts’ in order to get past it.  But ultimately I do think we pull it off and post all new highs in the not too distant future.  So I continue to "lean long", but I’m certainly not shy about taking profits.  In fact, if you're NOT in the market right now, you might be best served waiting on a pull back before you commit too much capital.

This week we are going to hear over 100 S&P companies announce earnings, and the market will experience some wild swings surrounding that news.  I have been watching the energy patch lately, and it's been doing well.  Some names that you might want to watch this week are: LNG, NBR, and NOG.

Tips:

My current short-term holds are:

-       LLTC – in at 36.60 (currently 36.70) – stop at entry

-       ORCL – in at 35.14 (currently 35.38) – stop at entry

-       LNG – in at 21.03 (currently 21.00) – stop at 20.80

-       PAY – in at 34.04 (currently 35.94) – stop at entry

-       PTEN – in at 19.78 (currently 20.14) – stop at entry

-       NOG – in at 17.30 (currently 17.31) – stop at entry

-       HD – in at 61.53 (currently 67.83) – stop at 65.60

-       MS in at 18.50 (currently 22.72) – stop at 21.00

-       SPY in at 141.97 (currently 150.03) – stop at 148.00

-       SIL – in at 24.51 (currently 20.76) – no stop yet

-       GLD (ETF for Gold) – in at 158.28, (currently 160.73) – no stop ($1,656.40 per physical ounce), AND

-       SLV (ETF for Silver) – in at 28.3 (currently 30.25) – no stop ($31.18 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>