Wednesday, March 23, 2011

Apocalypse Now !!

Here is the cover of the latest edition of Newsweek magazine. I think it is a good reflection of the over-the-top reaction to the disaster in Japan. Irrational fears of radiation overdoses make people crazy. (Geiger counters for radiation detection have sold out of the stores in Paris!)

At the top of this post is a weekly chart of the Tokyo Nikkei stock market average. You can see the panic drop on the earthquake- tsunami - nuclear meltdown fears. The Japanese market has since recovered part of that drop. I think it is a buy at current levels.

The Newsweek cover is not something I would expect to see near a bull market top. I think that the current bull market has further to go - at least to the S&P 1400 level and probably to 1500 or so. This would put the Dow at new historical highs near 15,000.

Wednesday, March 9, 2011

America in Decline ... (NOT!!)

Here is the cover of the latest issue of Time Magazine. It does not directly comment on any market. But despite the ham-handed attempt at editorial balance, the cover makes it pretty clear what the Times editors and, by inference, their readers believe.

This is not the kind of cover story one sees anywhere near a bull market top. It just reinforces my belief that stock prices in the USA have much further to rise before a drop of as much as 25% can materialize.

Tuesday, March 8, 2011

crude oil redux

Two weeks ago I highlighted the New York times headline on crude oil prices. Crude prices have moved up about five dollars a barrel since then. Above this post you will find two more pieces of evidence for what I see as a bullish investment crowd in crude oil.

The first image is of the latest cover of The Economist. It tells us that crude oil prices have lit the fuse of a bomb which will destroy the worldwide economic recovery.

The second image is of the front page of today's Chicago Tribune. It speaks for itself.

At the top of this post is a monthly chart of West Texas crude oil prices. The market is still trading well shy of its 2008 high of $147. But it is also up 300% from the $35 low of late 2008 and has been moving steadily higher for more than two years.

I think that while prices will probably move higher from here, maybe to $112 or so, the next big swing in crude oil prices will be downward.