This Week in Barrons - 3-11-12

This Week in
Barons: 3-11-12:
It’s Official - Greece Defaults!

The big news on Friday afternoon was that the ISDA declared Greece's bond payment structure a "credit event" which will indeed trigger Credit Default Swaps – which will then trigger (for the first time in a long time) a sovereign nation (Greece) that has finally declared itself in default (basically bankrupt!) Now, (1) How bad is this for the overall global financial picture, and (2) How bad is this concerning our stock market?

Let’s take a step back a minute. The two main reasons for the unification of Europe were: (1) If the nations could stop ‘fighting’ between each other, they would make for a powerful, centralized economic force. And (2) this model could then be used for a "One World Government Model" - that the socialist elites have been dreaming about for decades. But it was doomed from the start. Remember Greece could not get into the EU due to their Debt to GDP ratio. They enlisted the help of the most corrupt and sinister banksters on the planet (Goldman Sachs) – who proceeded to hide transactions, rename loans as assets, and did virtually anything (for a fee) to get Greece into the EU. But what Goldman couldn’t do is change the Club Med attitude of the Greeks, and then explain to the Germans (who out-produce the entire bloc) how both citizen groups get equal benefits from the EU! But Greece joined the EU and then “the big
event” hit – namely the Housing Bubble. The Housing Bubble was not a US invention. Spain, Portugal, Ireland and Greece were seeing housing prices increase by 40% per year. Why – because Central Banks the world over wanted growth. They opened the money spigots and relaxed the rules. Fake ratings and robo signings were not just a US behavior, it was global. So you have a group of countries cobbled together under fraud and corruption, include a global housing bubble, and when that bubble finally met its pin – down goes everything.

Now – how bad is this for the global financial picture. Well, the single best thing that Europe could do is to take the medicine, dissolve the union, go back to sovereign states and let the defaults happen. An example of this is Iceland taking its medicine 3 years ago, putting the crooks-banksters in JAIL, and Iceland just received another credit UPGRADE. But the US won't do that, and Europe certainly won't do that. So watch out for news from Spain, Portugal and Ireland. And with China sending more goods to Europe than the US, the global economy will indeed suffer. With Europe in recession, and its members going belly up, trade will be reduced. FYI, we just saw Brazil lower interest rates to try and keep their economy humming after demand for resources slowed. The world will suffer the effects of austerity. At some point it will become something of a downward spiral. Central Banks the world over will cut rates, and "expand their balance sheets" (print money) which will distort things even more. But as an "overall" it’s worthy to note that the world will be slowing.

And what effect is Greece going to have on our markets? Well, our economy is built on stimulus, fake interest rates, bailouts, and false economic reports. Some US banks will have exposure to the very Credit Default Swaps (CDS's) that the ISDA said must be paid. But even if our US institutions are effected, The Ben Bernanke will simply wink and nod, give the institution money, and give
the CEO a $40 million dollar bonus.

Just know that the market is going up for one reason – there are more buyers than sellers. And when the buyer is your own government with printed money – well that’s (to quote Terry Bradshaw): “Tough to beat!” This is the Obama election market, and if you happen to be a Democrat with a big liking for your socialist king, you’re in luck!

The Market:
We have been flirting with DOW 13K and the S&P 1371 for two weeks. There have been several attempts to get up and over it, but it wouldn't stick. I’ve been looking at a host of indicators from yearly cycles, to turn dates, to stochastics and they are all pointing to a market pull-down. On Tuesday we had a 90% down day causing the DOW to lose some 200+ points. But on Wednesday and Thursday they came in to drive us up some 80 points per day. Friday, despite the Greek news, they held us positive for the close, but the S&P ended at 1370 and the DOW ended at 12,922! Both of these are still slightly below the 1371 and 13k breakout levels. It’s absolutely possible that the Greek news will push the market into the correction we need. FYI - has anyone noticed the tidal wave of insider selling that we are seeing lately? I have a feeling that they will use the Greek default as the "excuse" for the market to backpedal.

But all that said, if the DOW gets over 13K, the S&P gets over 1371 and holds for a few days, chances are good the printing presses are running red hot and we're just going to ignore Greece and continue higher.

Now let’s talk briefly about the Employment Report that came out on Friday. It showed that we gained 227k jobs (vs the 206k that were expected) and the unemployment rate remained at 8.3%! Now, Obama can’t point to housing – so he’s going to try and point to jobs. Factually, if you take out the Birth/Death "adjustment" we only gained 135k jobs. But we remain mired in the longest jobs recession since the Great Depression. It's been 49 months since the US hit peak employment in January 2008. And with nonfarm payrolls still 5.33M below their old high, the jobs slump will continue for several more years. The previous jobs recession record was 47 months, and it came when the unemployment rate had only climbed to 6.3%. The real ‘rub’ comes from the Gallop report that was released. According to Gallup measurements, the unemployment rate rose to 9.1% in February from 8.6% previously (without seasonal adjustments), while
underemployment (combining unemployed with those working part-time but wanting full-time work) rose to 19.1%. Their assessment: "Regardless of what the government reports, (these) measures show a substantial deterioration since mid-January."

Now we all need to realize that in the long run, we're going to have another big stock market crash. It will resemble the crash from the Dot Coms in 2000, and the Housing Bubble crash. This "Printing Bubble" will burst, and when it does it's going to be a doozy – with the DOW ending below 6k. We might see a correction of 5 to 10% due to Greece start this week, but I think this correction will come back and the market will run higher into the election. But sometime between November and March 2013, I expect a long, protracted bear
market to hit that will erase all the gains that we've made. If we get a nice pull down here I’d be a buyer. If we don't (and we just keep
inching up), I'll continue to nibble around the edges and take it as it comes, but you won't find me "holding and hoping".

Tips:
On Friday morning we put out (via Twitter) a couple stocks that I was looking to buy. ANF was at 49.50 and I said that I like it if it could break over 50. I never put out a play that's already “in the area". Each play that I recommend is at a price that it has yet to attain. We entered it into our trading platform, and we automatically purchased shares as it crossed 50. Currently it’s up 1.04 per share. We won’t hold it below the entry price, and we will continue to increase the stops – just in case we get another 200 point down day as we did on Tuesday.

We were shaken out of most of our positions last week mostly due to the 200-point pullback. We kept our stops in place, and therefore captured the gains that we already had.

We’re currently holding:
- ANF – in at 50 (currently 51.04) – stop at entry,
- SLW – in at 34.80 (currently 35.85) – stop at entry,
- GLD (ETF for Gold) – in at 159.49, (currently 166.40) – no stop, AND
- SLV (ETF for Silver) – in at 28 (currently 33.25) – no stop.

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: .

Please write to 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:

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:

Until next week – be safe.
R.F. Culbertson

This Week in Barrons - 3-3-2012

This Week in Barons: 3-3-12:

I’ve seen the Enemy, and they are us!
One of the few ‘good’ things about a war is that you know who your enemy is. Unfortunately, in today’s economic war zone, we could be our own worst enemy.

“The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. Increasing America's debt weakens us domestically and internationally. Leadership means that, the buck stops here. Instead, Washington is shifting the burden of bad choices today, onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better!” … Senator Barack H. Obama, March 2006

So what happens now? I'd love to sit here and tell you all that the economic numbers you hear are real, and that we're digging out from under this mess, but I cannot. I don’t see anyway we can go back to anything that resembles "normal" unless we change back to the way we were.

Factually:
- AIG could escape paying taxes for as long as a decade because of the way the Treasury unilaterally bent the tax code during AIG's bailout. This rule twisting could deprive the government of tens of billions of dollars while boosting bonuses for AIG employees.
- The use of food stamps rose 0.5% in December, with a record 46.514M Americans now receiving the aid for a total government outlay of $6.22B per month.
- China has sharply cut the share of its foreign reserves held in dollars $3.2T to a decade low of 54% as of June 2011, from 65% in 2010, and 74% in 2006.
- According to Bloomberg: 75% of US equity trades are now done through Dark Pools.
- 28% of all US homes had near-negative equity (or below) in Dec, 2011.
- In housing: Atlanta, Cleveland, Detroit, and Las Vegas all have average home prices that still sit below their 2000 levels.
- In housing: the Case-Shiller indices for the nation, the 20-city composite, and the 10-city composite are all close to their lowest readings ever.
- In housing: during Q4 of 2011, 24% of homes sold in the U.S. were in some stage of foreclosure. The average price of a foreclosure-related sale was 29% below the average price of a non-foreclosure sale. The situation is not expected to improve this year with a backlog of 4M homes in foreclosure.

The enemy of America is not overseas. The enemy of America’s Economic recovery lurks right here inside her borders. To quote Senator Barak Obama: “America has a debt problem and a failure of leadership. Americans deserve better!”


The Market.
The struggle continues. There are those (Obama, The Ben Bernanke, the Bankers) that need this market to go up. And there are those that are scared to death of it and have left the market completely. You see, as the stock market is surging many investors just don't care. Individual investors have pulled $8.3B out of U.S. stock funds YTD, and have placed almost $10.6B into bond funds. “If the individual investors decide to dive back into the market, they have a lot of dry powder to drive the market higher” says S&P's Sam Stovall. “But, it will be difficult for the rally to continue much longer if they don't.”

Greece’s nightmare continues, as this week another 800 European banks lined up to absorb another $650B the ECB gave out – which was naturally given from our very own Fed.

Now, an interesting development this week, was that the Swiss and the Israeli's have decided that the US stock market seems like a great place to park their money. “The Bank of Israel will begin to pilot a program to invest a portion of its foreign currency reserves in U.S. equities. The investment (which in the initial phase will amount to 2 percent of the $77B reserves) will be made through UBS AG and BlackRock Inc.”, said Yossi Saadon a Bank of Israel spokesman. “At a later stage, the investment is expected to increase to 10 percent of the reserves.” In Switzerland, (at the end Q3, 2011) a number of central banks have started investing about 9 percent of their foreign-exchange reserves in US Equities. “The investment will be made in equity index trackers, and among stocks like Apple.” Really, we are so desperate to keep this market rally going, that we are allowing other nations to buy stock on our exchange. Now, if these nations lose money – does our Fed guarantee them against losses as well?

Every day the market hovers near breakout levels, desperate to get over S&P 1371, and DOW 13,000. My issue comes with the numbers that are coming out of this administration. Just this week the manufacturing numbers show that we built more ‘stuff’ than in either the Internet boom (1999 - 2000) or in the Credit Boom (2003 – 2007). Can someone please pull my finger? I'm torn over that. See, if you print another $15T and hand it to Goldman Sachs and J.P. Morgan - there's no doubt they can purchase enough stock to get us to DOW 20K. But expecting me to believe that we are manufacturing more stuff than in the two previous boom periods – please?

Here’s a video:
http://www.youtube.com/watch?v=BQZbOY5Q3ZU&feature=player_embedded
of a very proper gentlemen that is attempting to describe that he’s found $15T that no one can account for. Maybe this is the babbling of a deranged man. But begin to combine this with a few months ago the $6T in ‘fake’ US bonds that were seized in Switzerland. There are obviously some very strange things going on in the world as the US, UK, and Europe go through their death throes. Yet the market continues to hold up.

I see a lot of technical indications telling me that we're on the cusp of a correction, but (unfortunately) no technical chart can tell me what happens if by a wink and a nod, the Fed gives banks free money to put into index funds.

We've been leaning long, and it has been working, but it has been scary. Things feel fake and strained. There's no volume and the "Dark Pool" trading that Bloomberg reported on, is fast and furious. I've said for ten days now that we have to hurdle 1371 on the S&P and hold it for a few days to confirm a breakout. The market has not been able to do that. And, I said that this is the perfect time for a correction if one's about to hit. Yet each day we just "sit here" moving up and down around that level.

The Russell 2000 looks like it's in the first stages of rolling over. It was 83.30 just the other day, and Friday it got a bounce to save itself just above 80.00. If it loses 80, it could be the anchor that finally pulls the S&P and DOW into correction territory. Add remember, the Ben Bernanke did NOT talk of any more QE, therefore the index's are struggling, and the small caps are starting to fade. If the fade is going to happen, it's going to happen soon. On the other hand of course, if they magically find some wink money and some fake news reports - we could soar.

This Friday is this month’s Non-Farm Payroll report. Everyone expects that it's going to be less than last months "stellar" report, but if it’s really bad, that could be the straw that breaks the camel’s back and drives this market down.

Tips:
We sold some of our positions last week mostly due to our belief of not holding any stocks over their earnings announcement(s). We continue to keep our stops tight. On the dip, we did purchase additional GLD, and SLV last week as well.

We’re currently holding:
- SNDK SanDisk – in at 49.17 (currently 50.91) – stop at entry,
- NE Noble Energy – in at 40.02 (currently 40.31) – stop at 39.50,
- MUR Murphy Oil Co – in at 62.00 (currently 62.26) – stop at entry
- BHP BHP Billiton – in at 75.85 (currently 75.93) – stop at entry,
- ADBE Adobe Corp – in at 30.00 (currently 33.730) – stop at 32.50,
- SPY (ETF for S&P) – in at 131.16 (currently 137.37) – stop at 135.50,
- GLD (ETF for Gold) – in at 159.49, (currently 165.90) – no stop, AND
- SLV (ETF for Silver) – in at 28 (currently 33.65) – no stop.

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: .

Please write to 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:

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:
Until next week – be safe.

R.F. Culbertson

This week in Barrons - 2-26-12

This Week in Barons: 2-26-12:

All the Gold is not enough to give, in exchange for Virtue… Plato

After decades of not allowing citizens to own gold, China is openly promoting the private ownership of gold. Can you blame them? They see what funny money is doing to world economies and they want to own real gold again. And as a slap in the face to NY and London, in June, China is going to launch PAGE (the Pan Asian Gold Exchange). For the first time in a hundred years, there's going to be an exchange that challenges NY and London. The exchange is going to allow payment in Yuan (Chinese Dollars instead of U.S. Dollars). WHY? The short answer is that China is in a terrible box and wants out. They hold more US debt in the form of dollars than anyone else, and The Ben Bernanke (and Geithner) are steadily dropping the value of those dollars. China wants it's currency to be backed by gold, and respected as a an equal to the other world reserve currencies. We will see in June just what happens when NY and London are threatened by the first competition ever.

In terms of my thoughts on gold, John A directed me to Mr. Sinclair’s thoughts on Gold and I second his emotion:
- Shortly, China will be called upon to help provide funds to the IMF for bailout purposes. For this backstop, China will extract significant benefits.
- Greek gold will be held hostage to their debt, and this will accelerate both the trend of gold repatriation, and the utilization of other currencies (other than the US dollar) for payment of international goods and services.
- The volatility in gold, silver and equities is simply foreshadowing what is coming.
- The last man standing will be gold and gold alone.

In terms of exchanging Gold for Virtue, this week we were all witness to a blatant lie by President Obama when he said: "Anybody who tells you we can drill our way out of this problem doesn't know what they're talking about, or just isn't telling you the truth." Oh really? Well, we would need the EPA to approve additional refineries, and Obama would have to approve the Keystone pipeline – but putting those two together would give us $2 gas for decades. Why? Well, currently both US coasts are seeing $5 gas because they are purchasing (more expensive) imported oil due to the lack of refining capacity and a pipeline. While in ‘middle America’ we are seeing $3 gas because they’re using less expensive Texas crude and the excess refinery capacity. Imagine if we could process more oil, and we were allowed to bring it (via pipeline) from Canada – bingo - $2 gas.

But it’s easier (and politically more beneficial) to blame it on Iran. Now, there is a risk premium when a substantial portion of the world’s oil goes through a small channel that just happens to border Iran. However, the real question isn’t about Obama’s sanctions, but rather WHEN Israel will go in and blow up the reactor sites. Thus far, Obama has held them off, saying that sanctions will work. Iran has effectively countered that by initiating trade with China and India in a currency OTHER than U.S. dollars. And Iran has told Europe that Iran will not sell them any more oil! Honestly, Europe's in no shape to have to pay more for oil. The question is: why continue to push for sanctions versus letting Israel go in and do its thing? Well, I think we will see an invasion by Israel right about October. Obama knows that sitting Presidents do well in times of "war". So, if he lets Israel move in late September (early October), and we have to provide back up (since we're the ally); his chances of staying in the White House improve dramatically.

Understand, Israel will not allow a nuclear Iran, and the Federal Reserve will not allow a country to operate without U.S. petro dollars. Iran's invasion is a foregone conclusion and simply a matter of timing. My guess is that it will be Obama's "October Surprise".

So this year is indeed shaping up to be every bit as exciting as the Mayans had suggested. In just a few short months we're going to see China threaten the London and New York gold and silver manipulators via their own exchange. By November, I believe we'll have seen Israel attack Iran, and a small war break out over the Straights of Hormuz, thus bringing the U.S. into play. I'd suggest that buying gold and silver are still the two ways to stay safe in this mess.

The Market
DOW 13,000 has proven to be a formidable resistance, but the issue is really the S&P. While the DOW is the tourist stop (the single most watched and quoted index in the entire world), it’s comprised of JUST 30 stocks. The S&P however is 500 stocks, and represents a wider swath of industry than the DOW. When push comes to shove, the S&P is much more powerful than the DOW. So, as the S&P reached the 1350 level (placing it just below the big resistance area of 1360 to 1371) it became important to watch. Would they trade us sideways, build a base at that level and then push us higher? That makes sense because that's how markets advance. But the big negative is that the markets are ONLY moving because of the trillions of dollars that The Ben Bernanke printed, and will continue to print so Obama can point to and (like he did yesterday) say: “Our stock market is continuing to improve."

Some companies – like Apple (AAPL) would be "up" even if the market were not. It's a great company that makes money. But in the overall, there are very few instances of any real growth, just activity pockets because of the stimulus. This leaves most stocks being priced not on fundamentals, but on funny money, hence the danger.

The S&P is stuck in a resistance zone between 1360 to 1371 level, and the DOW can't soar unless the S&P breaks free. Now, the market is very, very overdue for a correction. You can smell it. The market wants to correct, but it keeps getting "saved" in the nick of time. In our short term trading account we have 9 positions and 8 of them are positive for us. But I hold them all nervously. At any moment we could pull down 8%, or 10%. My guess is that they're going to make one more attempt at pushing us through resistance and if we don't make it by mid-week, I'd expect some real selling to hit. I think it's a fine time to be overly cautious here. If the S&P loses 1350, look out below. If the S&P gets over 1371 for more than two days, we're going higher. In between 1350 and 1371, we’re walking in a minefield where one could blow up any minute.

Tips:

Jim T sent me a great chart this week – showing that the US per capita debt (under President Obama) would more than DOUBLE what exists currently in Greece. So if you think the U.S. Economy is NOT in trouble – think again!

We continued to lean long into this week – and keep our stops tight.

We’re currently holding:
- SNDK SanDisk – in at 49.17 (currently 48.83) – stop at 48.60,
- KOG Kodiak Oil and Gas – in at 10.55 (currently 10.80) – stop at 10.15,
- CPNO Copano Energy – in at 35.5 (currently 37.68) – stop at entry
- SWN Southwestern Energy – in at 34.36 (currently 35.40) – stop at entry
- DOV Dover Corp – in at 64.15 (currently 65.61) – stop at 65.15,
- ADBE Adobe Corp – in at 30.00 (currently 33.40) – stop at 32.80,
- SPY (ETF for S&P) – in at 131.16 (currently 136.94) – stop at 135.50,
- GLD (ETF for Gold) – in at 159.49, (currently 172.54) – no stop, AND
- SLV (ETF for Silver) – in at 28 (currently 34.41) – no stop.
- SOLD = FNSR Finisar Corp – $1.50 profit

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: .

Please write to 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:

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:
Until next week – be safe.

R.F. Culbertson

This Week in Barrons - 2-19-12

This Week in Barons: 2-19-12:
The Market Makes My Head Spin…

All – a short letter today due to the holiday!
The older I get, it seems that the faster time goes by. It’s the middle of February already – and wasn’t it just Christmas? We are also
seeing a very healthy density of utterly bizarre news, and it’s my assessment that the actual level of insanity is climbing to new heights. I tend to enjoy sniffing out the fraud and baloney of the Wall Street gangs – the likes of JP Morgan, Goldman Sachs, etc. – but here are some quick tidbits that rolled across my screen this week:
- $3.9 Billion in Fed Cash Flowed to Energy Firms With Ties to The White House
- Website helps Florida Co-Eds find ‘Sugar Daddys’
- Russia and Iran are still arming Syria
- Gasoline Prices up 83% during The Obama Administration
- Chicago is the most corrupt city in USA
- Obama’s deficit spending is costing each person $17,000, and each family $70,000 per year.
- US Voter Rolls in disarray – listing over 1.8M dead people as active

The point of the above is that each and every one of these little snippets has a story behind it – and the sheer magnitude of all the stories and insanity is simply overwhelming.


The Market:
There's a lot going on folks. We are in a technical no mans land. If we don’t hold the 1350 line on the S&P things can indeed get ugly. Why did I pick 1350? Well, the real barrier line is from 1355 to 1361, that's the old 3-year high. But I've noticed that when a market is trying to push up and through a multi-year high, it often takes a position right below that and "lurks" there. It builds a base, and just wiggles around for several days. Then it tries to make its move and bust over the old resistance. If we can't hold 1350, the "base" that
we need to build won't get built, and we're in for a 5 to 8% pullback.

But that all said, I told you last week that we'd see them get the market to the S&P 1350 level and they did. I also told you of course it doesn't belong there, it's a hope and extend rally. This whole move has been built on accounting lies, Bernanke money, and outright fraud. This market may very well soar to ALL NEW HIGHS. In fact, sometime this year it probably will, but is now the time, or do we get the pull back first? That's the part we are struggling with.

I’ve gotten really defensive starting last Friday, and have sold down a lot of positions and have taken a lot of profits. We still have a small handful of things working in case they do muster the oomph to blast us off, but my guess is that we get a pull down first. If we get a 5,
8, 10% pullback, I'll buy it like there’s no tomorrow, because The Ben Bernanke will use that pull back as an excuse to shovel QE3/4/and 5 on us, and we will rally big time.

Now, the European situation is technically hopeless. Greece is arguing over 130B Euro's and even if they get it, their debt to GDP is over 120%. It will solve nothing and everyone knows it. What if the hard liners on the right simply say no to more austerity? What if it really gets ugly and they just cut Greece loose from the EU zone? The U.S. market has an implied backstop. The Ben Bernanke has winked and nodded that if the market gets really soft, he'd be to the rescue with QE3. But how soft would it need to get? I think the market could fall 5 to 8 percent and potentially nothing would be done. But have it cross over 10% and keep moving toward a 20% correction – that will
cause a major Q3 eruption.

So, a good report out of Greece Sunday will probably propel us to new market highs very quickly, and we would see DOW 14K. If things don’t go so well over the weekend, there's a really good chance that this attempt at break out will fail and we're in for a pull back before they try again.


Tips:
Brad L writes us with some more facts:
- There are 23 elections around the world this year – a 50 year high for a single year!
- There is heavy down-volume coupled with light up-volume,
- The 52 week high list is pathetic,
- Bullish sentiment is 69% bulls, and
- Insider selling is 8.5 to 1 (insiders are taking profits) – which is quite high!

We continued to lean long into this week – and keep our stops tight. The gap up on Friday didn’t allow us to add all that much going into the long weekend. We’re currently holding:
- CPNO Copano Energy – in at 35.5 (currently 36.76) – stop at entry
- SWN Southwestern Energy – in at 34.36 (currently 35.54) – stop at entry
- FNSR Finisar Corp – in at 22.51 (currently 23.41) – stop at entry,
- DOV Dover Corp – in at 64.15 (currently 66.10) – stop at 65.15,
- ADBE Adobe Corp – in at 30.00 (currently 32.70) – stop at 31.80,
- SPY (ETF for S&P) – in at 131.16 (currently 136.75) – stop at 132.50,
- GLD (ETF for Gold) – in at 159.49, (currently 167.59) – no stop, AND
- SLV (ETF for Silver) – in at 28 (currently 32.30) – no stop.

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: .
Please write to 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: rfcfinancialnews.blogspot.com >.
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”:

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

http://rfcfinancialnews.blogspot.com

This Week in Barrons - 2-12-12

This Week in Barons: 2-12-12:
The Average American…

It wasn’t all that long ago that my view of the “Average American” was someone who: got up, went to work, earned money, maybe raised a family, saved for their old age, and potentially helped to take care of their parents. They were responsible for their actions. If they didn't work, they were not able to live well, which caused most people to get a job. The “Average American” was NOT: (a) One of the 46 million that are on food stamps. (b) One of the animals that trampled a Wal-Mart employee to death on Black Friday. Or (c) part of the 99%'rs that hate all things American because "He's got more than me."

I’m not sure you all caught this last week but the ‘Climate Catastrophe’ was called off! One of the fathers of Germany's modern green movement, Professor Dr. Fritz Vahrenholt (a social democrat and green activist) decided (along with geologist/paleontologist Dr. Sebastian Luning) to author a climate science skeptical book. Dr. Vahrenholt's skepticism started when he was asked to review an IPCC report on renewable energy. He found hundreds of errors, and when he pointed them out, IPCC officials simply brushed them aside. Stunned, he asked himself, "Is this the way they approached the climate assessment reports?" Dr. Vahrenholt decided to do some digging. His colleague Dr. Luning also gave him a copy of Andrew Montford's “The Hockey Stick Illusion.” He was horrified by the sloppiness and deception he found. In their book Dr. Vahrenholt and Dr. Luning cite over 800 sources (including over 80 charts and figures) and conclude: the climate catastrophe is called off. They conclude that the science was hyped, misinterpreted and in many instances invented. The book has started hitting the bookstores today and has already hit #1 on the Amazon.de list for environment books – and is continuing to climb on the overall bestseller chart. The reason I bring this up – is ‘climate change’ spawned literally thousands of new regulations. ‘Climate change’ created entire markets for "carbon credits". Companies couldn't expand because it would add to their carbon footprint. Companies spent hundreds of millions of dollars to update systems, and the ones that didn’t simply shut down and went to China. Do you think the ‘Average American’ will ever hear of this book?

My guess is that the ‘Average American’ thinks that the Greeks are just stupid, lazy, and dragging down the entire European Union. Factually, when the EU was drafted the Greeks couldn't get in. Greece didn't qualify because of their debt ratio. But Goldman Sachs came in and re-structured the financial ledgers in order to enable Greece to get in. Now that Greece is insolvent, who do you think is picking the bones off their dying corpse – absolutely – none other than the Goldman Sachs! Congratulations on ‘fudging’ the numbers to get Greece in, and being there to ‘fudge’ the numbers at the end.

The Market:
For some 12 years, that I’ve been involved in the market, there’s never been a period where you could sit back and say: 'This is easy". It's never easy. But that said, it was light years easier then, than it is now! The level of fraud and manipulation was simply much less. In previous years, you could invest via fundamentals: expansion, top and bottom lines, debt to equity ratios, and dividend paying abilities. (Remember: For stocks not paying dividends – you’re simply betting on someone buying it from you at a higher price.) Today, approximately 80% of all stocks traded are on this ‘Greater Fool Theory.’ (i.e. I'm going to buy XYZ because it's going to go up and I'll sell it to someone else. I am NOT buying it for the income stream – hold it for 10 years - and have the dividends end up ‘paying you’ for the stock.) Today it’s all about flipping – and that’s not bad – we just need to understand the game.

Today we don’t focus on the long-term stocks that much any more. Why? Two reasons are angst and volatility. I truly dislike being in a stock that's up $10 per share, and then having to sit through a pull down and a few months later you're up just $3. Sure, maybe the stock works its way back up and maybe even goes higher – but during that year (or more) you've done a lot of sitting and fretting. Another reason is volatility. Time frames have become compacted. Moves that used to take 2 years, now take 2 weeks. You once had to wait 6 months for your stock to move $4 – today we see $4 moves in 4 minutes. But the real problem of the long-term hold is that your entry point becomes very important. For example: If you started investing in 2007 – and you invested in index funds – allow me to remind you that in 2012 (5 years later) you still haven’t recovered your investment. So, when you're looking to hold for the long term: (a) look for a significant market "bottom", or (b) your investments need to have a lot of growth ahead of it. This market (currently) is far from a bottom!

We currently have a Federal Reserve that's placed over $25 Trillion in the global economy. We have Europe on the ropes, countries insolvent, we have a morbid housing market, and a horrible jobs picture. If the DOW was at 6000 right now – I’d be screaming BUY AND HOLD. But it’s at 12,800 and stinks like 5-day old fish. No thanks, getting long for the long haul way up here seems like suicide to me.

We've been doing a lot of short-term swings lately, meaning trades that last a few days to a couple weeks. But even that comes with risk because of something I can only consider "criminal" activity. For example: On Thursday, we heard from Mario Draghi (our man in Greece) that there was now a solid plan for Greece, they were getting funded, and for the first time things really looked great! Correspondingly, the market didn't go nuts but it held up nicely and we took on two new positions that were in breakout mode. Then Friday came, and we were told that there was NO Greek deal, and in fact they were sending the whole agreement back to the drawing board. Our positions quickly went from positive to negative "overnight" with no chance of backing out. Now Mario Draghi previously worked for Goldman Sachs – so do you think that he knew that things were ‘not good’ on Thursday? Of course he did. Do you think he got the word out to his Goldman Sachs buddies to get real short ahead of the news that he knew would come out on Friday? Please, this is the fraud and manipulation that we live with everyday.

If the market really reflected the economy, it would be at 7K right now, and looking lower. Instead we're trying to take out 13,000, and we just might! And if the S&P can hold over 1350 for a few days, and The Ben Bernanke resumes his daily operations, we could see the market rally like you've not seen in a long time to all new highs!

In a "real" world we'd all be short, and making a fortune as the market fell to 7K. Unfortunately, in this world, we could see QE3 announced and be at DOW 14K in 4 months. Here’s a headline from Saturday: “According to Bernanke: Housing may no longer be viewed as a Secure Investment!” Is that another push The Ben Bernanke is making to get investors to put money in the market instead of into housing? It sure could be! As Steve Forbes writes us: “Let’s think thru housing. To purchase a house you need at least 2 years on the same job, or longer if you’re self-employed. Now, as the workforce continues to contract (a 1.5M person contraction last month) – how many fewer people do you think will be buying homes in the next year?”

With the market at its present level, it could go either way very soon. The S&P is at 1343 and if it reclaims 1350+ and holds, my guess is there's more upside to come. But, if we can't reclaim 1350, it's my guess we're in for a 5 to 8 % pullback. So this coming week is indeed important.

Tips:
We continued to lean long into this week – and keep our stops tight – but the gap down caught us on Friday (as it did everyone outside of the brokerage houses!)

We’re currently holding:
- CREE – sold out at our stop,
- UYM – sold out at our stop,
- DOV - at 64.15 (currently 64.51) – stop at 64.25,
- SPY at 131.16 (currently 134.66) – stop at 133.50,
- ADBE at 30.00 (currently 32.21) – stop at 31.80,
- GLD at 159.49, (currently 167.30) – no stop, AND
- SLV at 28 (currently 32.57) – no stop.

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: .

Please write to 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”:

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:
Until next week – be safe.

R.F. Culbertson

This Week in Barrons - 1-29-12

This Week in Barons: 1-29-12:

“Money for Nothing, and the Chicks…” … Dire Straits
Every once in a while we get something right, and knock on wood, since Dec 1, we're on a roll and up over 21% in the New Year! We’ve gotten the January effect as we suggested and this week we received more ‘easing’ from The Ben Bernanke. Remember, Obama's running for office again, and since the true economy is on life support, one thing The Ben Bernanke can do is manipulate the markets in his favor. The Ben Bernanke will be removed from office if ANY Republican candidate is elected. So you have Obama needing a strong market that he can point to, and you have The Ben Bernanke willing to do the work necessary to create an up market because his job is on the line.

Well, this week, the Federal Open Market Committee (FOMC) finished up a two-day meeting where they were discussing what monetary policy to implement to help the economy strengthen. At noon we got the results of that meeting, and there were two interesting observations. One was that the economy is improving – but not at the speed that they would like; therefore, they are going to extend the amount of time that they're keeping interest rates "extraordinarily" low, from mid-2013 to late-2014 – which is incredible to me. The Ben Bernanke already lowered interest rates to the point where overnight lending rates are 0 - 0.25% to the banks. So, since he can't go lower than 0%, all he can do is extend the time line. He did just that, and basically said to the banks: "You guys get ‘Money for Nothing’ for 3 more years" – and banks love free money. Secondly the number of "dissenting" voters fell to 1. In other words, at these meetings, The Ben Bernanke is the chairman and all the invitees from the 12 member banks get to vote on the decisions. In October/Nov the number of dissenting voters was 3, and now it’s down to 1 – and that ‘one’ just didn’t agree with the timeline. So basically ALL the member banks are “ALL IN” for more Quantitative Easing.

But people are becoming wiser, and people know inherently that printing money is "bad" so instead; The Ben Bernanke talks about other elements such as buying up Mortgaged Backed Assets (MBA’s), and other "unconventional" schemes. Guess what? In order to buy back MBA's, it takes money. And the only way The Ben Bernanke can come up with any money is to print it! Call it what ever you want, the solution to The Ben Bernanke forever comes down to printing money out of thin air.

Let us not forget that this is the man that told Congress (in 2005) on the question of a speculative housing bubble resulting from cheap credit said: “These price increases largely reflect strong economic fundamentals." No Ben, these were liars loans, paid off credit ratings agencies, bribed appraisers, and bucket shops churning mortgages for fees – and you didn’t see that, right? This is the man that said: "There is absolutely no danger of a banking emergency" – just months before the Lehman Brothers collapse? What about in 2007, as the market started to turn, Ben told Congress: “We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system." Again we are talking about the man in charge of our entire economic policy. In January of 2008, two months before the nationalization of GSE’s Fannie Mae and Freddie Mac, Ben said: "Fannie and Freddie will make it through the storm." And for the worst Pinocchio moment of his life Ben chose June of 2009 when he said: "The Federal Reserve will not monetize the debt." Now, I’ll stop here because my point is that Ben is NOT a stupid man, just a liar – and there’s a big difference. The real reasons for keeping monetary policy at 0% for the next 3 years have nothing do with the housing industry, unemployment, or manufacturing. Not long ago, The Ben Bernanke announced a trillion dollar "swap" arrangement with the European Central Bank (ECB). Greece, Italy, Spain, Ireland and Portugal are broke, and it’s against the law for the ECB to lend directly to "Sovereign Governments". So, The Ben Bernanke, and Turbo Tax Geithner dreamed up this swap arrangement. The ECB borrows money at virtually nothing from the U.S., and lends it to the European Banks for 1%. The European Banks then lend to sovereign Governments by purchasing high-yielding bonds from the countries for 7%. That keeps Italy from crying default, and puts a nice hefty gain on the bank’s ledger. So The Ben Bernanke doesn’t care about unemployment, housing, savings accounts, and inflation – he really cares about his banking buddies in Europe. By the way, Who’s on the hook for those loans to Greece, Italy, Spain, Ireland and Portugal? Well, the U.S. / we are!

As a market measure for this maneuver you need to look no further than the reaction in Gold. Gold was $1,650 per ounce the day before the announcement, and two days later it is $1,740 per ounce. When fiat currencies fall – gold rises.

Also, there are rumors that India and Iran have completed steps to trade Iranian oil for gold, NOT going thru dollars first. This is a BIG deal, and we’re seeing a lot more ‘deals’ where the U.S. dollar is being circumvented. China and Iran are dealing directly in Yuans, while Russia and Iran deal in Rubles. As the true value of the dollar decreases, people are clamoring to get away from it as the world currency.

We see more sabre rattling concerning Iran. The elites want desperately for Iran to throw the first punch, so we can rush in and bomb them. This is pretty high stakes poker we’re playing here. We’ve put dozens of “sanctions” on Iran, trying to force them into giving up any (and all) nuclear ambitions. Now Iran is threatening to stop selling oil to Europe. If this comes to be, energy prices in Europe will spike, further weakening a very fragile, European economic situation.

The Market:
What happens when you promise "Free Money for 3 Years?" Well, the market loves it, and the banks (financials) get to use all that low cost money and make a fortune; because a part of what they do is to go speculate in the markets. But, I tend to think that there's even more to come. What the media will call QE3, is still in the wings, and it's my guess they will unleash it in March. We’re honestly on a path that’s impossible. All the central banks around the world have expanded their balance sheets to insane sizes, and the only way to keep it together is to continue to print money. In the past, civilizations that have "printed" money have fallen in disgrace, completely bankrupt. This time it's the entire world that's swimming in an excess of printed money. In reality, no one knows exactly how this will all shake out, but look at Gold and Silver. They are rising now that Central banks are buying it instead of selling it, and we’re hearing more and more of Gold being used as a currency. If that is the case, then Gold is destined to go higher. My estimate from 10 years ago was that Gold would ultimately see $2,400 dollars. I still believe that, and I see Silver hitting $70 as well. My point is, as they play more and more games with the fiat money, trying to prop up an entire globe swimming in debt, there's really very few other choices for a stable ‘currency’.

The perpetual manipulation of the precious metals will certainly continue. The JPM’s and other big guys naked short these (especially Silver) at will. In fact, we could see some weakness on Monday, since they generally have a habit of beating on it around options expiration. So, if Monday holds strong and into Tuesday, then something odd is going on and maybe (just maybe) the JPM's of the world are backing away for a while. We'll see.

In stock land, the "good news" from Bernanke didn't last long, and that was to be expected. The market was in a jungle of technical nightmares, from overbought stochastics, to double tops that have held since July. So, while they loved the idea of an extension of free money, they didn't get a true stimulus shock, and they decided to take more profits.

For a couple of reasons, I tend to think we're going to remain soggy for another week or so. First, while extending free money to 3 years instead of 2 is a good thing to bankers, there was no immediate injection of cash. They wanted the instantaneous printing of stimulus money, and they didn't get it; therefore, they may pout a bit and take some profits. Secondly, there is a huge bond auction coming on Feb 9. Recently people have been selling bonds and sticking their toes in the stock market waters. If they have an auction and no one shows – then rates will have to rise and The Ben Bernanke just said that’s a ‘No-No’. So, I could see the bankers taking the market down some in order to purchase more bonds. The big banks would borrow from The Ben Bernanke and then instantly use that cash to buy Government bonds. So, if the big institutions swing from using their "free money" to speculate in stocks, and instead use it to buy up bonds, I can see the market not getting the volumes it needs to swing higher.

Tips:
We had some really spectacular gains lately, as we leaned long at the right times. This week we sold STX for an 11% gain in two weeks, FWLT for a 15% gain in two weeks, CLF $4 dollars per share, TMO for $3.50. So, we really cannot complain at all, and are having a very good start to the year. Now I think it's time to be a bit cautious. I could be wrong and they run this puppy, but...I'm not convinced yet.

So for all the Twitter followers – thanks – and to reinforce what we’re currently holding:
- ADBE at 30 (currently 31.12) – stop at entry,
- KBR at 29.80 (currently 32.34) – stop at 31.50,
- SE at 30.20 (currently 31.63) – stop at 31.10,
- GLD at 159.49, (currently 169.00) - AND
- SLV at 28 (currently 33.04)

As you’ve seen – we continue to exercise a lot of discipline in terms of selling at our stops and just moving on to another stock. We’ll continue that philosophy especially next week.

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: .

Please write to 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”:

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:
Until next week – be safe.

R.F. Culbertson

This Week in Barrons - 1-22-12

This Week in Barons: 1-22-12:

“Up, Up and Away” … Superman

Here’s a news blurb that I found somewhat startling – “The average time a U.S. stock is held increased last year from 20 seconds to 22 seconds.” According to Michael Hudson, “It's a shorter time frame than even the average foreign currency trade, which is now 30 seconds. It's all about computers (with high-frequency trading) making up 70% of all volume.”

The trading day is 6.5 hours long, or 390 minutes long, or 23,400 seconds long. And if the average hold time is 22 seconds, one stock is changing hands 1,062 times in a day. Now multiply that by all the stocks. Last year $38 Billion was removed from mutual funds and stock funds as people moved to gold, silver, bonds, and spending money. So, if you take out all that money, and then add in the idea that 70% of all volume is high frequency trading lasting about 20 seconds – Is anyone really buying or selling stocks anymore? It sure doesn't seem like it!

Obviously it’s not humans doing these trades, but rather computers. And with this it’s not the ‘attitudes of millions of investors’ that are moving markets, but rather the high frequency computers that are moving markets. For example: didn’t it bother anyone (last week) that Goldman Sachs missed their revenue projections by 30% last quarter but the stock went UP $6. Didn’t it bother anyone that the International Monetary Fund (IMF) is looking to borrow another $1 Trillion (because the first half trillion might not be enough) and our market went UP for the week? Now, I’m not advocating buying and selling 22 seconds later (like Wall Street has morphed into), but ‘active management’ is the only way to play in this market today.

What if you can’t manipulate your funds all that quickly? What if your funds are a part of a 401K or other structure that doesn’t allow for daily or even monthly manipulations? That ‘absolutely’ will require a more ‘macro’ view of the economy. If you have a broad enough ‘fund family’, potentially you can find a gold, silver, precious metals fund – but let’s assume your fund family isn’t that broad. Our ‘down the road’ view is that The Ben Bernanke is going to unleash QE4/3. (I say QE4 because QE3 was the U.S. loaning the European Central Bank (ECB) half a trillion dollars.) The Ben Bernanke will do QE4/3 because Obama is in the fight of his life to remain President. Obama needs an "up" market so he can take credit. The Ben Bernanke would be fired the day a Republican got in office. Therefore, The Ben Bernanke will do what ever Obama wants.

And this week (I digress) Obama wanted to veto the "Keystone Pipeline" bill. It would have been an opportunity to ship good oil and gas from a friendly nation down to our Texas refineries. It would have employed (some estimates show) 20,000 workers. It would put everyone from construction to chemical operators to work. But much worse was a quote Obama used to justify his veto: "However many jobs might be generated by a Keystone pipeline, they're going to be a lot fewer than the jobs that are created by extending the payroll tax cut and extending unemployment insurance." Huh? I know 6th graders that would construct an argument better than that. Somehow giving couch potatoes 150 weeks of unemployment payments creates more jobs than a 2 thousand mile construction job and the entire product that would be delivered, refined, and shipped. If you're a Democrat (and you love this guy), this even has to leave you scratching your head.

In any event (concerning your 401K), I truly believe massive stimulus is on the way. Stocks should go up, and so should gold and silver. Of course the U.S. can't afford the stimulus and of course a day of real reckoning will hit, but that's in the future. I would consider shifting some of that ‘cash’ in your 401K into a more growth oriented fund investment. We continue to lean long into this rally and it's going well so far. Let's keep our fingers crossed for more.

The Market:

Up, up and away… yes it’s a Superman market lately that shrugs off bad news like Superman shrugged off bullets. This week showed that J.Q. Public is putting his toes back in the water for the first time in almost a year. Last year J.Q. Public pulled over $39 Billion out of mutual funds, and this week $11 Billion came roaring back into them. It's not a record by any means, but it's a pretty big chunk of change. So why is everyone so optimistic? Well, there comes a time when people think they've weathered the worst: housing collapse, Lehman’s collapse, bailouts, rounds of stimulus, and horrible unemployment. They witnessed America's credit rating get cut for the first time in history. They remember August, 2011 when the market would drop 500 points on words out of Europe, and then gain 400 back, only to lose 300 the next day. J.Q. Public feels like he’s been through it all – and he’s still standing!

But J.Q. Public’s $11 Billion isn't why the market is moving higher. It's moving higher because there's a growing chorus of people expecting The Ben Bernanke to let loose another round of stimulus. I've been saying for quite some time that the next ‘round’ is on its way. This week, if indeed he does mention that more stimulus is coming, fund managers will plow into the market because they remember the market going up 6,000 points on QE1, and another 2,000 on QE2. So if this stimulus would be $1 Trillion, we could see another 2,000-point gain or more.

Now, if The Ben Bernanke and this week’s FOMC meeting produce nothing, and there's no News Conference – then I suggest this market will go down. So that's the deal, this market is rising in anticipation of more Federal Reserve stimulus. If we get it, we could see a very powerful rally that takes us into the fall. I think we will because The Ben Bernanke needs Obama, and Obama needs a rising market in order to get re-elected. It's pretty much assured that it's coming.

With additional stimulus, along with stocks rising, gold and silver will also increase as they are the anti-fiat money and will guard against the inflation that will eat into your dollars. Materials generally do well in a stimulus inspired market run. Last year some of our biggest swing trades were names like UYM. We bought UYM for around $30 and sold it 8 months later for $52 dollars. CLF and ANR did phenomenally well for us as well. We'll be looking at those and quite a few others that aren't so widely tracked going forward.

A reader had a question concerning how I arrive at my ‘Twitter’ posts each day. Every day I scan for particular set ups. I’m looking for stocks with a "reason" to go up, nearing a resistance level, and we have a flat to rising market. When I find some, I post them on Twitter (handle taylorpamm) with their corresponding ‘buy-in’ prices. I normally post them each morning, and if some get up and over their ‘buy-in’ prices – I take them. And then thru this Sunday letter you’ll see what’s remaining in my active portfolio, and the ‘stops’ that I have set for those ones that I am still holding. Lately – if something dips below the price that I paid for it – I normally sell it. Now, because not every stock gets over my ‘buy-in’ price that day I’m forced to keep a running list of some of the old ones that I’ve recommended as well (dating back a couple weeks). I continue to put up new ones as they develop, yet the old one's are still "relevant". For example: on December 11th, I mentioned that a move on CCJ over $19.65 was buyable. Well, it didn’t get over that mark for several weeks – but it’s now sitting at $23.50. What I do is take these ‘radar ideas’ that I tweet about – and load them into my stock trading ‘alert’ system. I let the ‘trading software’ alert me that one of these is getting close to the buy in area – and then I decide whether to pull the trigger.

Tips:
So for all the Twitter followers – thanks – and to reinforce what we’re holding:
- ADBE at 30 (currently 30.06) – stop at entry,
- LRCX at 40.16 (currently 42.45) – stop at 41.00,
- TMO at 50.01 (currently 51.14) – stop at 50.50,
- KBR at 29.80 (currently 32.01) – stop at 31.20,
- STX at 18.61 (currently 20.00) – stop at 19.20,
- SE at 30.20 (currently 31.44) – stop at 30.90,
- FWLT at 20.00 (currently 23.11) – stop at 21.60,
- GLD at 159.49, (currently 162.00) - AND
- SLV at 28 (currently 31.27)

DS writes in with a tip on BroadVision – BVSN – a stock that he purchased for $8.31 on December 12th, and is now at $27.05 – clearing the latest technical resistance level. It’s clearly on a rocket-ship – nice call DS!

As you’ve seen – we’ve been very true to sticking to our stops and just moving on to another stock. We’ll continue that philosophy especially next week.

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

Please be safe out there!

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