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.

Numerous States Already Feeling Recession

The AP is reporting 23 states are struggling with lower tax revenues due to the recession.

ETF Watchlist

If you are looking for diversification here are some ETFs that I like.
Basic Materials XLB - Broke out last week and is retesting
Consumer Staples XLP - Still trending sideways but is showing relative strength, historically a very strong industry group during a recession
Energy XLE - Broke resistance about a month back and is finally pulling back some, buy on the bounce
Utilities XLU - Low interest rates drives investors to the markets looking for high dividend yields

Food Shortage Hits Home

The world wide food shortage is hitting the San Fransisco treat.

Consulting: If you can't be part of the solution, there is good money in prolonging the problem.

The business services industry group has been performing well because of the economy. Many of these companies specialize in helping companies become more efficient and profitable. A bad economy is good news for many of these firms as they will be called upon for consulting insights and help. Others simply serve businesses in the day-to-day functions and were outperforming the markets in 2001 and 2002. All of them are uptrending or within a basing pattern.

ADP - Automatic Data Processing
ERES - Eresearch Tech
FCN - FTI Consulting
GPN - Global Payments
HEW - Hewitt Associates Inc
HIL - Hill International
IBM - International Business Machines
IT - Gartner Inc.
MA - Mastercard
MAN - Manpower
MCHX - Marchex Inc
NCI - Navigant Consulting
PAYX - Paychex Inc
PRAA - Portfolio Recovery Accociates
VVI - Viad Corp
WW - Watson Wyatt Worldwide
WXS - Wright Express Corp

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.

The Cure for High Oil Prices

Can more regulation and more taxes somehow bring down oil prices? What in the heck are they thinking in Washington. Commodities and stocks work in long-term 18 year cycles. That is what happened in the 1900s, 1930s, 1970s, and today. It isn't government conspiracy or Bush and his big oil friends who want to drill in Anwar it is demand from China and India coupled with a weak dollar. This is the price we pay when 3rd world countries progress and our Monetary policy makers lack backbone. Rejoice in the wealth being built in these countries and realize eventually, supply will meet demand through new wells, efficiency gains, and alternatives. It is not an over night fix so be ready to endure high inflation for quite some time. There are plenty of ways to profit from this commodity boom so become educated. Read the not so well written but sufficient book "Hot Commodities" by investing legend Jim Rogers!

Interesting side note, the week of Black Thursday just before the Great Depression, congress was holding hearings on how to tax the railroads for their "windfall profits". You gotta love government. I bet if you looked back in 1999 when oil was trading around $11 a barrel congress was looking for a way to subsidize the oil companies to keep them afloat. Sometimes you get the bull like these oil guys are now, sometimes you get the horn like they did in 1999 and couldn't stay in business.

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!

The Road to end Free Markets

Congress is tripping over themselves to give the Fed more power to tinker with the economy. The so-called free market and financially smart Republicans have turned there back on the Milton Friedman's lassiez-faire economic policies that so many claim to hold to. The Democrats are in line to play a little one-up-manship to take the regulation as far as they possibly can.

Why can't we accept recessions as a normal part of life, as a healthy shake out, as way the invisible hand disciplines the ignorant the greedy. Congress reminds me of the parent who won't allow a child to feel the weight of the consequences of their choices and then can't figure out why the child is such a loser when faced with life on his/her own.

Nuts and Bolts of It

Look at the Inverse Head & Shoulders pattern on Fastenal Co. (FAST). According to the pattern it should move up to $55 in the next 5 months. Terrific volume confirmation with the MACD lows moving higher gives great confidence in this trade.

Fed Speculation

The market is rallying this morning in anticipation of the Fed announcement. This kind of excitement tells me anything less than a full point will disappoint and probably lead to a sell off. Of course another interest rate cut in front of today's inflation news seems foolish to me. It supposedly takes 6 months for a cut to take affect. Cutting rates won't make banks lend money. Cutting rates won't raise consumer confidence. I sure miss Reagan's strong dollar policy that fed the markets through 1980-90s creating one of the largest bull markets the country has ever seen.

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.

Recession Double Talk

Currently we see financial mavens claiming a recession won't occur, will occur, we are already in a recession, etc. Last week the President spoke concerning the economy prophesying a recession won't happen. He may be correct not because the economy will return to gang-buster growth, but because of the definition of a recession.

A recession is defined by two consecutive terms of lower growth. If we see GDP at 5% than 4% than 3% we would say we're in a recession. What if we are at 5% than 3 % then up to 3.5% back down to 2.9%, is that a recession? According to the strict definition of a recession the answer is no. Now, what if we are at 5%, then 2%, and then grow to 2.01%, 2.02%, 2.03% and so on. Technically it isn't a recession but the economy sucks royal!!

If we had a real leader, and believe me no one on either side of the aisle fits this bill, they would warn people of economic slow down and preparation instead of the Recession Double Talk we are getting now.

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.

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.