Sorry – abbreviated Updates today. Back to back art shows. Will try to be more comprehensive Tuesday and Wednesday.

Bama Bashing

The McCain campaign has been relentless in its negative adds. Since Boston is next to swing state New Hampshire we get to see them all. Now Palin is "unfairly" claiming that Obama is "palling around with terrorists who would target their own country" This attack has has a clear racial tinge to – he is not like us The Associated Press story denouncing these attacks.

Obviously McCain campaign is doing everything it can to keep the subject off the economy. You can read a lot more about this and see Obama’s new add countering this at the following site TalkingPointsMemo (scroll down)


For several weeks many have wondered why McCain’s/Keating ties have not been used in this campaign. You can see a short 97 second video on it here LINK

McCain was directly involved and financially benefited from in the lasts major scandal and it was the same type of unregulated corruption that caused both meltdowns. He was admonished for it on the floor of the Senate, Keating spent 4 years in jail, the crisis cause a 23% drop in the markets,and we had to bail out lots of baks (over 100 billion in 1990 dollars)

Obama campaign has dropped the Keating Bomb .

Best Advise

Being out of stocks is best for long term investors. Do nothing if you are already in stocks. Make sure your $ are FDIC insured and money markets are SPIC insured. Trading opportunity exists



Index % Change Volume

Dow -1.50% up

NASDQ -1.48% up

S&P500 -1.35% up

Russell2000 -2.87% –

US Market & Foreign Markets

All the major US indexes are trading at new lows and so are most of the foreign stock exchanges. The major US indexes are trading below levels That they were before Bush took office. Never a good sign that stocks take a hit and volume is increased and above average.

The weekly chart pattern (scroll down at links below) of the benchmark S&P 500 & other major indexes have since last years October high formed a series of lower lows and lower highs. Technically this is about as bearish as you can get.

Will give more on fundamentals tomorrow

Chart of the benchmark S&P 500

Chart of the Russell 2000

Chart of the NASDQ

Chart of the Dow

How Close is Credit to Freezing UP

3 MTB chart

OIL no longer RULES

Chart of oil (WTIC)

The Dollar

Usually an inverse relationship to oil prices.

Chart of Dollar


Chart of VIX.

Fear reigns as the VIX is now at 45.52. It’s inter-day low of a few days ago was 48.40. The extreme level of fear indicates an oversold market and the possibility of at least a short term bounce.

Short Term Outlook

Note: There is a major difference between Traders who think of trades in hours, days and weeks) and Long term Investors who think of investments in terms of years and decades.


Long Term Outlook – Bearish

TechnicalsThe VIX gives a clear buy signal. (Short term traders only)
Fundamentals – financial mortgage transparency problem is far far far far far far far far far bigger than anyone thought. But there is hope in a bailout plan, especially one that has broad support.

(Caution – this “Outlook” is based on US equities and while US markets greatly influence other markets it is not necessarily the outlook for recommended sectors.)

People feel like we are in a recession. The actual strict definition – 2 quarters of negative GDP growth has not occurred. How bad the recession will be is be is the major question.

Asset Allocation/Recommended Sectors (long term)

* 85% to 100% Cash

* 10% US Index Funds
UWM (2x what Russell 2000 does) & QLD (2X what the NASDQ does) Generally – Really Big Banks Look good

*5% Emerging Markets
EWZ (Brazil) should out perform other emerging markets

Chief Strategy – Buy the dips of trending sector Traders who have a strong tolerance for risk and belief that the bailout will pass both branches of congress to jump in on dips. Long term Investors who can tolerate very very high risk and are 100% in cash could nibble.
Changes to Bottom Line Section Bolded

As Always Do Your Own Research Before Investing

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