Nuclear Power the ONLY Real Alternative

In light of the food shortages caused in part by alternative foods, nuclear power is becoming the only real feasible alternative energy source. Currently wind and solar can't create the capacity needed, once again bringing us back to Nuclear Energy. Even the founder of Greenpeace believes it's time to assimilate it as an alternative. The exchange-traded fund for Nuclear Power is NLR, which gives you a way to profit.

Hedge your Shopping List

Assuming you're not one of those people who work for the Fed who believe that food and energy don't count as inflation, you have probably noticed the rise in food costs. The world is seeing inflation from a rise in demand for human consumption and energy alternatives. You can actually profit from this phenomenon by investing the DBA Agricultural exchange traded commodity fund.

No Foolin I'm Bullish

Despite all my rantings on the economy and how I think the government is making things worse I am bullish for April. Seasonally speaking the market cycle is bullish this month. Last months break down in commodities on the DBA and the DBC along with weakness in Gold (GLD) and Oil (USO) tell me there is a window of relief from out of control commodity bulls. Even though Australia didn't cut rates last night we are seeing the dollar strengthen against most all other currencies, FXA, FXC, FXE, etc. Dollar strength tends to lead the stock market.

Don't get get me wrong, I am long-term bearish still. I think we will see the CNBC and BTV start marking the end of the credit crisis, calling Bernanke a hero, but the rally will be a sucker's rally. We have another $300 billion in losses coming for our countries financial institutions, we will see interest rate hikes later in the year when the Fed is forced to address inflation, and the rest of the world is now feeling out financial pain. Play the bullishiness while it last but use stops and position sizing!

Fed's Sunday Surprise

The Fed cut the discount rate today instead of waiting all the way to Tuesday when they will most likely cut the overnight rate another half a point. Finally some are saying enough is enough. That's what we were saying at the end of last year when the Euro was only 1.25 of the dollar.

EURO GONE WILD

Not to be mistaken or associated with the all to well known similar oo-mox title with "wild" in its heading (guys, you all know what that is about from those late night info-mercials), the euro has now hit the target on a ascending triangle formation (as seen below.) It has run and made a 700 pip move and what a move it was.

Now that it has made the predicted move I am starting to see a possible pull back down to a support level. I am not sure if it will pull back to 1.4900 or 1.5000, but it may pull back to a 1.5200 if it does. Currently, anything trading against the dollar seems to be the best bet to trade and may be the case for a while to come. It is hard to see this because I think the Fed and the administration wants the dollar to stay down. I like to think there is a method to their madness but for now, my ferengi oo-mox is trading against the dollar for now.

~G

CLIENT Number 9

If you have been under a rock today or haven't been able to read the news headlines today, you have missed the next new episode of Law and Order. You really can't make up this stuff some times and people really don't think things through no matter how smart they are.

Governor Elliot Spitzer of New York City is on the verge of resigning today because he was caught in a prostitution ring sting. He just talked with reporters about how he needs to work on and focus on gaining his families respect and trust back. Well, that may be difficult since he was such a "defender of truth" in his prosecution days.

Many on Wall Street, you can hear cheering and possibly chanting "ding dong the witch is dead!" I think he will need to resign his post as governor of NY in his 345th day of governorship.

Spitzer and the Witch from Wizard of Oz (Don't they seem similar?)

How can he think that he could get away with it being in a club called the Emperors club that sets up these prostitutes for high net worth clients. Also, on one of the busiest days of the year when individuals cheat on their spouse and government monitoring of this day for those cheats, February 13th (day before valentines day), you would think that this guy would know better. I guess that is why some in New York got the feeling that he had the "god" complex or untouchable air about him. I don't know him but this isn't good and must go down in a idiot-in-charge stupidity.

Again, there must be someway to make something off of this event. That is just how good Ferengi's think. I know others will. It is too bad but I think that all those that have been wronged by this guy, should have some fun and reprocussion on. All is fair in love and money!!! Have fun you Wall Street guys!!!!!!! Law and Order writers, you have an easy script here. Have some fun with it too.

Diana Shipping Inc. (DSX)

Diana Shipping Inc (DSX)


So, Bajoran Profit has been busy lately being a producer of some sorts and so asked me to post this information on Diana Shipping Inc. I am sure that he will be writing more on this position later.

DSX currently has a peg ratio at .74 and a dividend yield over 8% and has recently bounced off a good support level. There could be a return to a $32.50 level and then on up even higher. These are my thoughts but Bajoran Profit can speak for himself.

As for me, I am going to get some more latinum and have a party with my last trade on the Euro. Nice run and still running. The pullback never emerged but that is ok, I am still bullish. I see it going to 1.5450 at this rate. With the large ascending triangle that it made, this 500 pip move is possible. I am keeping my stops semi tight on the way up just in case some econo-nerd from the fed or government says something to pull it back. We will see.
- oo-mox

My Euro Trade

Like most Ferengi's, their passion usually revolves around 2 things: Latinum and oo-mox. Since we don't trade latinum here on earth yet, and we call OO-MOX something else, my passions are not so dissimilar. As you know (all 1 reader out there) that I am passionate about currency trading.

Here is a trade that I recently did on the EUR/USD. I actually told several people to play the bounce off of a strong diagonal support level. There has been a strong resistance level at 1.4900 since November. The Euro has tested this level three times and also creating higher bottoms three times. On the last support level bottom that it created on 2/07/08, was a great entry play to the resistance level again. A move from 1.4500 to the resistance was the play to make. Who doesn't want to make 400 pips? I set my target at 1.4950 and got out yesterday with a 450 pip profit. Not bad for a very good predictive play.

Recent trade on the EUR/USD

Now the pair has broken this strong resistance level and is continuing up another 200 pips to a very overbought area. I expect a pull back now to the new support of 1.4900 and then a bounce back up to 1.51 to even higher levels. I really can see a move to 1.60 now a higher possibility over the next year. I guess a wait and see on that one. But an new entry at a bounce of 1.490 may be a good bounce.


New trades on the EUR/USD - one short reversal trade

For a short trade from these highs to 1.4900 may be a good quick short term play because of overbought area on the position. It may be good but be careful and have fun if you do. Watch your risk and don't over leverage.

We may see some wild things happening but I am in a short trade already to the support area. We will see how it goes.

More Doom and Gloom

I found this article to be very insightful as far as a Doomsday scenario. Remember it doesn't have to be all issues occurring at once but just a few of them back to back, to make life really difficult.

Intercepted Fed Communications

Ferengi Traders have recently intercepted a communication to the Federal Reserve. The author of the letter has yet to be ascertained but the content is very relevant.

Dear the Fed,
You suck. You don't have a backbone and as a result you are slowly and
very surely making our country and our currency irrelevant. Usually the
masses rebel and bring down great empires but luckily for us democracy
fixed that problem. Unfortunately, democracy can't fix how lame and
fickle you are and so you will be our ruin.
A few things to tell you:
1) Inflation isn't 2% like your pathetic CPI ex-Food & Energy says it
is.
First of all, as far as I can tell food and energy are the only two
items you should NEVER exclude from an inflation index. Tell your wife
and kids they can have everything in the consumer basket except food and
energy and you will quickly see that they are actually the two MOST
important and indispensable factors in the CPI. You can find substitutes
for, or go without, everything in the basket EXCEPT those two.
Secondly, stop using "Seasonally Adjusted Intervention Analysis" it's as
sketchy as the Seldom-Accepted-Accounting-Principles (SAAP) we use to
cook the books here at LoS. I mean writing a computer program to
automatically remove any items in the basket which deviate meaningfully
from the previous year? Isn't the point of the data to SHOW the change
versus the previous year not hide it? Oh, I found the list of items that
you've adjusted for and it's embarrassing.
The majority of adjustments remove price increases with much less
frequent adjustments for price declines. You've basically left dairy
products out of the index for the last 5 years citing outrageous
one-offs like "a generally tight cheese market" as justification for
this. And as if reporting a separate ex-energy index wasn't enough
you've statistically intervened to remove the effect of higher energy
prices even in the index that's supposed to INCLUDE energy. In one
outrageous case you removed the effect of fuel oil for three months in
March 03 and the reason you cited for the "abnormal"
move was the "end of winter," yeah I was surprised as sh-t when winter
ended in Spring 03, it was wild! For a real measure go back to the old
method, you'll see inflation is at least double what you're reporting.
2) Grow a spine you slimy invertebrate
The market has a memory. Over the past 15 years you trained us to
believe that no matter how much risk we take, and how much we lever that
risk, if anything really scary comes down the pike then you will bail us
out. Now we all run around like reckless, spoiled 16 year olds bidding
up the price of anything we can get our hands on and not worrying about
consequences because daddy (Greenspan) and mommy (Bernanke - that's
right you're spineless AND a girl) will get us out of any trouble we get in.
Well you're only making the problem worse and we aren't learning anything so
we'll continue taking stupid leveraged bets creating bubble after bubble so
you can tip-toe around trying not to pop any of them.
3) You're lying to yourself if you think we still have real GDP growth
in this country.
I challenge you to find one measure of wealth OTHER THAN THE DOLLAR
which shows the US economy as worth more now than in 2001. If I wanted
to buy our country it would cost me 30% fewer euros today than it did in
2001, it would cost me less bars of gold, less barrels of oil, less ounces of copper,
less btu's of natural gas, less cubic feet of lumber, less of almost anything that has
intrinsic value. Yet you keep reporting GDP growth, why? Because your quick fix
is to effectively print more money so that in dollar units everything is getting more
"valuable". But guess what, to the 95% of the world that doesn't use dollars the true
value of the US economy has been shrinking, rapidly.
It's like a company doing a 5 for 4 reverse stock split every year and
claiming to have 20% eps growth, you haven't changed the earnings just
the units those earnings are measured in. The rest of the world is
telling you our country is worth less by massively selling our currency
and you still naively think we're growing value - I feel like I'm at a
gathering of the flat earth society or in Zimbabwenomics 101.
This will come back to bite you but not nearly as much as it bites us.
The cheaper the dollar gets the more expensive all our imports get,
inflation will rise faster than you can statistically manipulate it and
when that happens expected inflation goes through the roof (which as you
yourself have pointed out many times is by far the most serious threat
to economic existence). Then the only way out will be interest rate
increases as swift and severe as all the cuts have been. All the bubbles
will pop at once and then we're really in for it. Maybe it's 10 years
away but there's a toll collector at the end of every free ride.
When will you learn that recession is ok? It's actually healthy, it's
the cycle, it's how things have worked for a 1,000 years. Trying to
prevent every small recession is going to end in one huge recession (ie.
depression) and no one will trust you anymore which is a much bigger
problem. No economy in history has ever been able to successfully
inflate its way to health, this won't be any different.
Benny, I know you had to trade in your hypothalamus and spine to be fed
chairman and now you biologically over-react to everything and are
incapable of standing up straight when confronted by bully-morons like
Kramer. But I'm hoping you at least still have your brain. Before you
had this job all your published research showed that central banks
should strictly target inflation and should be ignorant of asset prices.
You had good reasons for this conclusion, don't forget them.

Subprimely,

Long or Short Capital Management

Bernake: The Dollar Destoyer!

So the word on the street today is the Fed may once again reduce rates. Earthlings have become so scared of a recession that they are willing to destroy the value of the dollar to just delay the inevitable. Look, like it or not we are going into a recession. Short sited Earth bankers and borrowers were willing to lend money to any homo-sapien that could fog a mirror and they are just afraid to let banks pay the consequences. Where are the Milton Friedman lasse faire economists? Why are they so afraid to let the foolish businessmen take their lumps (Ferengi are not responsible for the stupidity of other races)? New financial leaders will rise out of the ashes and they will be all the wiser because of it.

The Ferengi watched in admiration of President Ronald Regan and his understanding of a strong dollar policy, "The Dollar will be as good as gold" was the cry then. Aren't all these FOMC people suppose to be your so called Regan Republicans? Why are they so willing to let the dollar die on the vine?

Money in the currency market flows to the country that is usually paying the best savings rates. The US was the envy of the world and the dollar was strong all through the 80-90s, the strong dollar policy helped the US lead the world in development and strength. Every time Bernake seeks to lower the interest rate to cave to Wall Street traders he further weakens the dollar. Interest Rates are still at very historical lows, maintaining the current rate will at least help to stabilize the dollar. There is no cure for the housing market just give it up already. Let the market shake out and run its course.

In 1929 where we faced similar economic issues and the Fed increase the interest rates in order to strengthen the dollar and combat inflation but then sparked the worst sell off in the stock market. In 1998 the Fed had a similar liquidity crisis thanks to the "genius" of Long-Term Capital Management and all the banks that lent them money. The Fed increased liquidity by lower interest rates at the time to bail the banks out, but the dropping commodity market and deflation made the economic situation favorable for the time and the cuts didn't hurt. This time we are in a harder situation because earth has a liquidity issue created once again by the ridiculous bankers lending for any reason, but the cutting of the interest rates is perpetuating inflation and an already bullish commodity market. Raising interest rates to combat the inflation may put us into 1929 decline but lowering the rates puts into 1970s type inflation. The only logical course from my point of view is to just leave the rates alone. Quit tinkering with it. Allow this economy to play its way out.

Bernake believes that the rest of the world is going to eventually fall into recession just like the US so the rate cuts will eventually be countered by the cuts in other countries. The world is bigger than it used to be. New large consumers like China and India may not bring the kind of slow down we expect. Countries like Canada, Mexico, Australia, and Russia who are profiting from the skyrocketing commodity prices and may make up much of the consumption the US will slack off on because wealth is increasing in those areas. Bernake may very well be right but it seems to me he is spinning the revolver with a few extra rounds.

Finding Stocks The Ferengi Way

Here are a few key Ferengi Rules of Acquisition that can helps us find stocks in which we would want to trade. These rules are significant because they lead us into a top down approach. A wise man can hear profit in the wind because he is looking for the next opportunity. He understands that in a bull market everyone looks like a trading guru but a bear weeds out the chaff. The crowd jumps on at the end when the wise and prudent are selling and those who have become educated will reap the rewards.

Rule 22 – A wise man can hear profit in the wind
Rule 44 – Never confuse wisdom with luck
Rule 69 – Ferengi are not responsible for the stupidity of other races
Rule 74 – Knowledge equals profit
Rule 162 – Even in the worst of times someone turns a profit
Rule 217 – You can’t free a fish from water

Below you will find relative strength charts of four different industry groups versus the S&P 500. If the chart is uptrending then the industry group is outperforming the S&P 500 whereas the opposite is true if we were searching for bearish stocks. The recent decline in the markets makes the wise trader prove his mettle. As I mentioned before the prudent investor is looking for the next opportunity. Since stocks tend to move with their industry groups we can find good stocks by finding industry groups with strength.

Relative Strength Charts

Major Drugs

I particularly like this chart because it has recently broken out of a down trend. Although we didn’t get the very bottom (and rarely will we ever) we may be getting in on a fresh new uptrend.

Insurance Accident & Health

Insurance gives me similar excitement because we see it was in a sideways basing pattern for some time. Now we see it has broken out of its consolidation and a new uptrend may be on the way.

Tobacco

Tobacco has been showing strength for some time so we aren’t necessarily finding a bottom but we are seeing a break out of a “resting period”. These companies do a lot of exporting so they are benefiting from a weak American dollar. Also, any Ferengi investor understands what a good investment addictive products are!

Oil & Gas Operations

We have all seen gas and oil companies profiting from the rise in oil prices. Once again the weak dollar along with higher world demand for crude has driven oil prices higher and higher. A break out of this consolidation is also evident on the chart.

Here we have identified four possible groups of opportunity. Look for my next postings where I will identify stocks and ETF stocks that will allow us to begin out profiteering.

On a side note, these are all industry groups that perform well when the economy is about to go into recession.