Money Grows

When You know

How it Flows



The European Union


Andrea Merkel/Germany




Andrea Merle – NEIN


Andrea Merkel has said NEIN to any


that would allow the ECB

(European Central Bank)

to stimulate and rescue the EU, like our Fed.

See - Bernanke Hero/Villain


George Soros

[Left Wing]

on Euro crisis


3 Months to save the EURO




“You can NOT

reduce the debt burden

by shrinking the economy,

only by growing your way out of it”


Nobel Prize Winner

Milton Friedman

[Right Wing]




“buy long-term

government securities [today's QE]

and they can keep buying them

and providing high-powered money

until the high powered money starts

getting the economy

in an expansion.”


Even this President

Ronald Reagan



when confronted with a

minor Recession chose stimulus

He added more government jobs



Why doesn’t Austerity work when

a country/World is in recession


If you are having a tough time, you tighten your belt and spend less.

But what happens to a country where everyone tightens their belt?

Everyone spends less and the GDP goes down because no one is buying. Money stops flowing. Unemployment explodes higher and fewer are able to pay taxes.


No matter how angry you are at

those in debt or the banksters,

that anger just clouds your mind


The AUSTERITY Solution

to recover from a Recession

Does NOT work.


This is happening

throughout Europe

as the bankers/banksters/Merkel

who own the debt & derivatives

on the debt demand

only austerity.




Paul’s Corner



You Were Warned!


This Saturday in the comments section, I suggested y’all review Ron Brown’s Weekend Report. It’s an excellent review of the current market and Ron gave examples of simple chart actions that you should review and understand a head and shoulder top and the bear flag.

Ron’s Weekend Market Report:

Ron explained the head and shoulder chart formation and he shows the breakdown of the neck line on May 4, which was a nasty day in the market.

So, what does one bad day have to do with the value of my portfolio? Barr always suggests we buy the dip!

As we look back now, that break down through the neck line was a good warning and I’ll wager my 1 share of FB, the big boys were unloading stock from that point on. If you observe and understand a simple chart formation such as the head and shoulders top, next time you see one you might start protecting your portfolio!

After watching Ron’s movie, I took a look back at that May 4 date using my EdgeRater program to see what sort of warning shot we received.




The top circled line in the chart shows how the various indexes, S&P 500, NYSE, Dow 30, etc. moved down roughly 30% down through their Bollinger Bands in one day, we had a Kahuna!.  My good friend Ian Woodward warns that when you have a Kahuna with a 3 bucket down day (down 30%) sit up and take notice! A -30% move down in the Bollinger Band is serious!

From Ian’s last blog:

Kahuna (Little and Big) The Kahuna indicator measures volatility and momentum by looking at the one-day change in %B. The Big Kahuna is a 1-day change in %B of plus/minus 0.40. A Little Kahuna is a 1-day change in %B of plus/minus 0.24. Big Kahunas are signs of strong momentum (either up or down) and work well with the Eureka signal to identify tops and bottoms.

In the comments section from May 7, I suggested a review of Ian’s blog from the evening before where he discussed in detail the previous Friday’s 30% decline in the indexes position in their Bollinger Bands. Please review this blog!

Ian’s May 7 Blog Link:

So, we had a major shot across the bow May 4 and what do we see this past Friday? Another red Kahuna! This one was not quite as strong as the May 4 Kahuna, but it’s still a major move not to be ignored.  As Ron suggests in his Weekend Report, this past Friday’s down volume wasn’t large enough to be considered a “bottom” in the market. (Good grief!)

So my friends we were warned a month ago, just by looking at the charts, gloom and doom were knocking at the door. The charts probably indicate we haven’t hit bottom, are you protecting your grandkids inheritance or have you purchased another bottle of Tums?

Breaking news, added Sunday evening, as one would expect, Ian spent Sunday writing a great blog discussing the state of the market and what to watch for. It’s a must read!

The rest is up to you depending on your stomach:  Foxhole, Short, Dabble, but wait for the QUALITY of the Bounce if you are already out, using these concepts to stay on the right side of the Market.  Don’t forget we need Eurekas and Kahunas to the upside. No excuse now after my last blog note of a Glossary of Terms used.

Ian’s Blog Sunday June  3:

Disclaimer, these comments were written Sunday morning and are intended for education only. As we all know, by the open Monday morning all bets and suggestions are off!






Stock markets and Economies

are more

globalized  and interconnected

than ever



The World’s Largest Economic Block

- The European Union –

is leading worldwide stocks lower.


  • 411 uses the yield of the 10 year Spanish bond as a leading indicator of market direction – Our canary in a Coal mine. – Bond yield up = stocks down
  • On 3/2 Spanish bond hits a low of 4.87%, in mid April it tries to hold its 6.0% resistance level and in Early May breaks up through the 6.0% resistance. (see chart Below)
  • All major markets, that are interconnected through trading and especially banking, are fixated on Europe’s slow meltdown

No changes in LTO

till Spanish bonds close

below at 6.25%.


Longer Term Outlook

3 months+







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