7/31/09

Did you notice...?

Did you notice that the market tends to rise the last few days of the month and the first few days of the next month? This is a good time to think about selling (if you need to do it) because you will trade in a stronger market.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

A neat idea

WASHINGTON (AP) -- The House of Representatives voted Friday to rush $2 billion into the popular but financially strapped "cash for clunkers" car purchase program, heeding calls from U.S. consumers who hope to keep taking advantage of the trade-in incentives.

Called the Car Allowance Rebate System, or CARS, the program is designed to help the economy and the environment by spurring new car sales. Car owners can receive federal subsidies of up to $4,500 for trading in their old cars for new ones that achieve significantly higher gas mileage.

It sounds like a neat idea. We give someone $4,500 to buy a car to keep the company producing so that the people who are kept at work pay $4,500 to someone else.....Does it sound like a Ponzi scheme, or am I wrong? How can this program help the economy?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

Off the cuff

They have made "the too big to fail" even bigger (see acquisitions of Bank of America). In other words ... more of the same!

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

There is a lot of money in the system, but....


The Fed put a lot of money into the banking system (monetary base). Banks, however, are keeping most of it (bank reserves) at the Fed because the Fed pays interest on reserves since October 2008 (click on the chart to enlarge).

All this money is available to the banks to lend in the future. This situation is very bullish for the market over the long term because it shows there is a lot of additional liquidity to be used to buy stocks.

"Do not fight the Fed" seems to be right one more time, one more liquidity cycle.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

No doubt about it....


No doubt about it. The trend of the market is up. And the trend is your friend. Enjoy!

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/30/09

Amazing story about our tax system

This story is from the Tax Foundation.

Newly released data from the IRS clearly debunks the conventional Beltway rhetoric that the "rich" are not paying their fair share of taxes and disproportionately benefited from the Bush tax cuts.

Indeed, the IRS data shows that in 2007—the most recent data available—the top 1 percent of taxpayers paid 40.4 percent of the total income taxes collected by the federal government. This is the highest percentage in modern history. By contrast, the top 1 percent paid 24.8 percent of the income tax burden in 1987, the year following the 1986 tax reform act.

Remarkably, the share of the tax burden borne by the top 1 percent now exceeds the share paid by the bottom 95 percent of taxpayers combined. In 2007, the bottom 95 percent paid 39.4 percent of the income tax burden. This is down from the 58 percent of the total income tax burden they paid twenty years ago.

To put this in perspective, the top 1 percent is comprised of just 1.4 million taxpayers and they pay a larger share of the income tax burden now than the bottom 134 million taxpayers combined.

Some in Washington say the tax system is still not progressive enough. However, the recent IRS data bolsters the findings of an OECD study released last year showing that the U.S.—not France or Sweden—has the most progressive income tax system among OECD nations. We rely more heavily on the top 10 percent of taxpayers than does any nation and our poor people have the lowest tax burden of those in any nation.

We are definitely overdue for some honesty in the debate over the progressivity of the nation's tax burden before lawmakers enact any new taxes to pay for expanded health care.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/29/09

Are commodities trying to tell us ....


Commodities were very weak today (click on the chart to enlarge). They seem to form a double top. Are they? Why is it important? Because commodities are very sensitive to economic conditions. They may be saying the economy is weakening again. Time will tell.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/28/09

Promises, promises

News. Gov. Arnold Schwarzenegger on Tuesday is expected to use his line-item veto power to make additional cuts to California's latest spending plan—a move advocates fear could further hurt the poor.

Social service advocates worry the Republican governor has little choice but to go after money counties receive to administer welfare and social service benefits as he seeks to restore a reserve fund for the state.

My point. Politicians will promise anything to stay in power. But when people do no earn all that is given by the politicans, the politicians have to fold. We do not seem to learn.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

Did you notice that ....

....when the market declines, as today, high grade bonds such as the ETFs LQD, MBB, and BND go up?

Besides, high-grade bonds tend to rise (prices) during the summer months. Exactly the opposite action of stocks.

My point is that there is always a bull market .... somewhere.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

The dollar and our economy

A currency reflects the strengths and the weaknesses of a country relative to other countries. A strong country has a strong currency. A weak country has a weak currency.

In the 1970s the dollar collapsed as we were following inflationary policies. The dollar peaked in 2004 and declined through 2007. Its prolonged decline anticipated the mess we are in.

The dollar is an important indicator of our future. A weak dollar does not spell good news for us. The dollar peaked in March and has been declining since then. Is it trying to tell us the economy will get in trouble again?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/27/09

Are we at the threshold of a cold era?

What happened to the sunspots? Ever since Samuel Heinrich Schwabe, a German astronomer, first noted in 1843 that sunspots burgeon and wane over a roughly 11-year cycle, scientists have carefully watched the Sun’s activity.

In the latest lull, the Sun should have reached its calmest, least pockmarked state last fall. Among some global warming skeptics, there is speculation that the Sun may be on the verge of falling into an extended slumber similar to the so-called Maunder Minimum, several sunspot-scarce decades during the 17th and 18th centuries that coincided with an extended chilly period.(Source: accuweather.com)

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

When do we start fighting back?

"It's frustrating when (banks) are getting bailed out for bad decisions they made, that there isn't more assistance for the small business," said Eric Geedey, who manages Caffe Sportivo for Sakelarios.

When does the government stop? They own autos, banks, unions, insurance, housing financing,....Washington is creating a mentality that the government will help when you are in trouble with handouts. What is the incentive to survive, to fight, to make it? What is happening to us?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

Good news?

News. July 27 (Bloomberg) -- Analysts are raising U.S. profit estimates for the first time since credit markets froze two years ago, reducing valuations even after the steepest rally since the Great Depression.

The estimates indicate S&P 500 corporate earnings will rise 25 percent from this year’s projected $59.80 a share, which would be the biggest increase since 1995, the data show.

My point. Investors did not believe in the move of the market. The news were terrible. And the market kept rising. Now sentiment is beginning to change. People forget the market discounts the news.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/25/09

The recession ended in June

The leading indicators of the Conference Board, assuming they are not going to be substantially revised, suggest the recession ended in June. This conclusion is derived from the strong rate of improvement of the past few months of these gauges.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

Unemployment claims may be giving the wrong signal


Unemployment claims are an important leading indicator of the economy. They tend to decline a few months ahead of an economic recovery (see chart).

The decline in claims of the past several weeks gives us hope that the labor market and the economy are mending.

But do not jump to conclusions says Northern Trust. Initial jobless claims may be distorted by seasonal factors based on prior history of auto industry layoffs. It is important to note that auto industry layoffs occurred sooner than expected and that the underlying trend of initial jobless claims is pointing south.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/24/09

The stock market and the economy



The stock market is strong when the economy is weak. Why? Because the stock market responds to the injection of liquidity orchestrated by the Fed to stimulate the economy.

Finally, the economy responds to the massive easing. Commodities, inflation, and interest rates rise. This is the beginning of the end for the bull market.

The economy eventually slows down or enter into a recession. The Fed eases again and the show starts all over again.

What is disturbing right now is that the bank stocks (click on the chart to enlarge) remain weak. Does this mean this is not a typical business cycle? Stay tuned.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

What amazes me is.....

What amazes me is how many people are bearish about the market. They look for a trading range or a correction.

Yet, the market keeps going up, relentlessly. Who is right and who is wrong? The market is right, of course. And the market is trying to tell us something, but we keep ignoring the message. Until it is too late. Then, only then, we have to worry.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

About inflation

I think people confuse short-term and long-term. Then you have to add the odds of being right. Then you have to decide what are you going to do about it.

Prices are declining -- right now. Consumer and producer prices declined in the past 12 months.

This is what happens when the economy is weak and unemployment is rising. Inflation rises several months -- up to 2 years --- after the expansion is under way. So, in the near term you should not fear inflation. The odds are close to 100%.

I recognize the Fed is printing money aggressively, the deficit is ballooning etc..etc...etc...At some point inflation will rise. When? Not in the near term. Odds are close to 100%.

Now, right now, what are you going to do about it? Bet on deflation or very low inflation.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/22/09

California

"California spending cuts spark fury", the FT reports.

I beg Washington (and the American people) to learn the lesson. It is easy for the politicians to give what we ask for. But if governments cannot deliver what they promised, the outcome is social unrest.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

What is bothering me

The market seems to be willing to move higher. Even commodities stopped correcting and are rising again. The strength in commodities reflects an improving global economy.

Why then bank stocks remain weak and in a downtrend? The market needs the bank stocks to keep rising.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/21/09

Thought of the day

Make no mistake about it. This is the time we have to pay the piper. They promised, promised, promised....and then promised.

We liked what they told us...the most powerful...the richest....the strongest....the best...

Listening today to Bernanke I could not fail but think....this is the time we have to pay the piper for the fake hopes they sold to us....

What to do? Read...study..learn...think...listen...research...

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/20/09

An e-mail I received from concerned doctors about the proposed healthcare bill

Hi All-

I have forwarded the link sent to me by an OB/GYN in our community. No one in congress has read this enormous health care bill in its entirety, and in its present form has concerning restrictions on expensive tests such as MRI’s, as well as the expense associated with care for the critically ill ( they sure make hospice sound like a fun place….). As a cancer patient who has NEVER had to wait to receive treatment or had the government decide which treatment I can have, this is just unacceptable.

The reality is that some change IS necessary in our health care system to provide greater access and affordability. However, the changes in the proposed legislation are drastic and far reaching for the 80% of Americans who are happy with their current health care. Understanding our social responsibilities as physicians, we are willing to do our part. However, we are also small business owners responsible for the employment and health insurance of over 50 families. While our taxes and malpractice continue to climb, as our Medicare reimbursement is being cut.

The current proposals will financially force small employers as well as school districts and other organizations into the government Public Health Option for health care. Small business owners simply can’t weather this downturn in the economy without cutting costs somewhere. If businesses don’t cover their employees, fines will be imposed by the government in amounts equal to the cost of the public option – brilliant on their part. The private insurance industry will not be able to compete against a cheaper, government subsidized plan. Each one of us will LOSE our choice to a single payer system.

Don’t be fooled by the American Medical Associations endorsement. A small fraction of the Medical Community (~ 25%) actually belongs to the AMA . In fact in a recent on-line poll of M.D.’s and D.O.’s ( conducted by SERMO – an internet physician community website), 94 % of physicians DO NOT support the current bill. It is clear that the AMA does NOT represent the majority of physicians.

Those of you from Arizona know of the physician shortages we already face within our community. The proposed cuts in reimbursement planned for doctors and hospitals with Medicare and The Public Option will make it difficult to run our small businesses and impossible to recruit physicians to our area. Many physicians in our community are not accepting new patients and we are in the dangerous position of having one trauma center for over a million people.

With the 12 year educational commitment and the financial debt incurred to become a physician, fewer people are choosing medicine as a career. You cannot add 40 million people into a system that does not have enough doctors and nurses without creating chaos. We need to start by first reinforcing the infrastructure, and then making careful changes.

As physicians, we all agree that reform needs to take place, but this is not third world medicine as the media would have you believe. Our patients receive excellent care with cutting edge diagnostics and treatments. Addressing the problem of waste, affordability and access is paramount. We feel that the current proposals would dismantle the system at the expense of quality and choice……. we don’t have to scrap the whole system. Congress is taking a very complicated problem and trying to RUSH a solution due to some artificially self-imposed deadline. The implications for unsustainable cost and lack of choice are very grave. The long term consequences will be irreversible once set into motion. Will there be rationing of health care? More than likely if we go down the wrong road.

Please take the time to sign the petition below and e-mail your congressman to slow it down and actually READ the proposed bill. Once they do, they will never vote for it. In addition, congress and the president have exempted themselves from the proposed Public Health Option………If they really believe this bill offers choice and accessibility, they should be willing to have the coverage for their families…. apparently, they are not.

Patient care should not be a partisan issue.

Please forward this to those who want a voice in their medical care,

Liz Almli , M.D.
Diplomate of the American Board of Anesthesiology

Scott N. Sheftel M.D.
Fellow, American Academy of Dermatology



Hi Everyone,

If the Government is allowed to implement its plans for universal healthcare the way it is currently going, we will suffer loss of choice, availability, and ultimately quality of our medical care in this country. I am not sure how anyone can possibly believe that the answer to the health care crisis is to increase government control and management.

Please take a minute to sign this petition keeping Government control OUT of healthcare: http://www.freeourhealthcarenow.com/

Thanks,

Victor Chen, MD
Fellow, American College of Obstetricians and Gynecologists

7/19/09

Thoughts about the national debt

The national debt represents a transfer of wealth from "us" to "them" -- the bond holders.

The problem is that this transfer of wealth increases the class inequalities between "us" and "them".

By increasing taxes to pay down the debt we further increase the inequalities between classes.

Another problem is, as shown by several studies, countries with large inequalities between social classes grow more slowly. Social discontent is the logical outcome to high national debt.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/18/09

In search of power and wealth

The history of money, philosophy, man, and commodities reveals fascinating patterns. The history of humankind is the history of power. Power of the markets, power of ideas.

A power group is an assembly of people with the same objectives and same philosophies, committed to the achievement of their goals. Ultimately, power and wealth.

Some examples. The communist power structure of the USSR, the ultimate expression of power designed to dominate a country. Any action was allowed to achieve this objective.

The management of a company struggles to acquire and maintain power over the market of their products. They achieve wealth and status in the process. This effort does not have a negative connotation. Management can provide financial security for their employees. Management compensation, however, is an important determinant of their behavior.

The unions represent an interesting power group. Their objective is to achieve wealth and well-being, making sure members are justly compensated for their work. The bureaucracy of a country is a major power group. Power is achieved by making sure more regulations are issued to protect us. If something goes wrong, lack of resources is the main culprit. They typically ask for more money to do the required job. This is how bureaucracy increases power and wealth (job security).

Older people represent a power group. They gave us Medicare and Social Security and we do not want to give it up. We would rather sink with the ship than try to save it. We have power and we want to keep our wealth.

Through the millennia, the church has been a major power group. Those who visit the European museums and listen to heavenly music enjoy the remnants of its immense power and wealth.

Industries such as housing, insurance, banking, as well as ethnic and religious groups, regulators, and “green” activists represent important power groups. The crucial question is how do they interact? What can we learn from how they conduct themselves? I am working on it.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/17/09

Is this a new pattern?


Is the trading range shown above (click on the chart to enlarge) the new pattern we need to follow? Is the market building a base for the next move up? Is 950 the next important hurdle to overcome?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

More of the same

News. BOSTON (AP) - Boston Mayor Tom Menino says the city is willing to offer a $200,000 loan to prevent the city's financially struggling African-American weekly newspaper from shutting down permanently.

Menino tells The Boston Globe that the loan will come from the Boston Local Development Corp., a private nonprofit administered by the Boston Redevelopment Authority that provides cash to struggling small businesses.

My point. This way of thinking about housing was one of the major causes of the problems we are facing. When will we stop "helping" and drive the poor into a bigger financial hole? Why not a tax holiday? Why increase their debt load? I just do not understand this way of thinking.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/11/09

Enjoy!


I love Albeniz and John Williams is giving a superb interpretation of Sevilla. Enjoy and have a nice week-end. I will be traveling for a few days.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

Contrary opinion

Very few people are expecting the following scenario. It is sort of a contrary opinion scenario. Just something to think about. It is not necessarily my outlook.

1. Because of the aging population, the US economy is entering a period of stagnation.
2. The Fed has been and remains tight. They printed a lot of money, but they have just replaced a small portion of the wealth destroyed since 2007.
3. Deflation, not inflation, is what we are facing.
4. Earnings will be stagnant for many years.
5. Commodities will go nowhere.
6. Gold will be weak because of the lack of inflation.
7. Bonds are going to be the investment of choice.
8. Bonds will outperform stocks.
9. The dollar will remain firm.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/10/09

The fight between bulls and bears continues


The fight between bulls and bears continues. The Dow broke below 8300 (880 for the S&P 500) with no much fanfare (click on the chart to enlarge).


Momentum seems down. The 13-week moving average went below the 34-week moving average. Of course, this is a lagging indicator, but it has had a good batting average in the past. Stay tuned.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/9/09

An interesting chart showing the fight between bulls and bears


I am fascinated by this chart of the Dow and its support line. 8300 seems to be an important support level, which is now becoming crucial resistance (or so I believe).

I am fascinated by the fight between bulls and bears with the Dow at current levels. It looks like the bears are succeeding in keeping the Dow below 8300. Will they continue to force the market down? Is 7800 the next support level. Time will tell, of course.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/8/09

An important support level has been broken this morning


The Dow has broken on the downside an important support level (click on the chart to enlarge). Is this important? Stay tuned.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/7/09

Technology and the business cycle

News. July 7 (Bloomberg) -- U.S. stocks tumbled, sending the Standard & Poor’s 500 Index to the lowest level since May 1, on concern technology spending will slow and second-quarter earnings will fail to justify a four-month rally in equities.

Spending in projects to improve productivity takes place when the economy is strengthening. This could be the reason investment in technology may be lagging in the future.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

Trading volume -- an interesting pattern


This chart shows the price action of the S&P 500 since last Fall (click on the chart to enlarge). I found the following pattern intriguing. Do you agree?

.... High volume in November and the market rallied.
.... Volume declines as the market moves higher.
.... In January volume started rising and eventually the market dived.
.... Volume soared and the market bottomed in March with volume rising as in November .
.... The market rallied in March and volume declined.

What is reasonable to expect? I let you fill the blanks.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/6/09

The message of commodities


Are commodities peaking? If they are, they signal weakening economic conditions ahead. Should we buy bonds then?

Interesting questions.


To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

The market is still facing strong headwinds

Profits at S&P 500 companies dropped last quarter and will also contract in the three months ending in September, extending the stretch of declines to a record nine quarters, according to analysts’ estimates compiled by Bloomberg.

Unfortunately, if the economy remains weak, business will have a hard time to make money.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/4/09

Happy 4th of July!

Time to relax and have a great week-end. Enjoy this breathtaking adagio.


To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

Returns and investment strategies

Returns of $100,000 in the past 10 years (these returns were computed using MSN Money charting program).

$300,000 in FNMIX (Fidelity New Market Income)
$190,000 in FSICX (Fidelity Strategic Income)
$172,000 in FGMNX (Fidelity Ginnie Mae)
$171,000 in FBIDX (Fidelity US Bond Index)
$67,000 in the S&P 500

The point. The purpose of this information is to show that there are asset classes (such as high and low-grade bonds) outperforming the market by a wide margin in specific periods of time. (Please note, these are not recommendations.)

I believe we are facing an investment environment where diversification will continue to provide disappointing results. The way to survive this investment environment is to be focused in a few investment choices, the opposite of diversification.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/3/09

I might have missed it

I just spent (again) a lot of money to fix a small engine "gummed up" by gas containing ethanol. Of course, the government provides incentives (read: guaranteed profits) to companies to produce it. The money we "save" on energy has to be given to a mechanic to compensate for the poor quality of gas we produce. Am I coming ahead? I do not know. I let you judge.

Another thought. The administration is talking about bailing out banks, healthcare, auto industry, consumers,....

I do not hear about giving business incentives to increase productive investments to re-gain our lost competitiveness and to encourage hiring. Am I missing something?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/2/09

Business cycles and investment strategies

The behavior of business cycle indicators and asset classes pricing seem to be closely linked. This is what I have discussed at length in my book Profiting in Bull or Bear Markets and in my publication The Peter Dag Portfolio:

1. Declines in stock market prices are followed by
2. A weak economy, which is followed by
3. Lower commodities, which are followed by
4. Lower high-grade bond yields (and higher bond prices), which are followed by .....

If the market continues to decline, we should expect the above sequence of events to unfold.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

Watch high-grade bonds


Watch high-grade bonds (click on the chart to enlarge). MBB has outperformed the S&P 500 by a wide margin in the past 12 months.

Another interesting note. High-grade bond yields tend to decline (bond prices to rise) more often than not during the second half of the year.

Another pattern I noticed. It is not unusual to see yields decline (bond prices rise) when commodities are weak.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977

7/1/09

Watch commodities


Commodities may give us some clues on the direction of the market (click on the graph to enlarge).

They declined until March and the market was weak. They started rising in March and the market strengthened.

Commodities look tired. Will the market follow again the trend of commodities?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977