First of all I would like to wish everyone a very Merry Christmas and a very happy new year. In addition i hope that next year is even better for all of you as far as investing goes. For those that missed the last few issues where we started to talk about the great financial pox, I am going to include the link to Gold-Eagle where you can find the whole series ( the series has 4 parts to it) The Great Financial Pox parts 1-4. 


If you go to http://www.wallstreetcourier.com/index1.htm  and look at the table that they have you will notice that new highs are seriously exceeding the new lows, even on down days the number of new lows does not increase significantly. This is one of the many indicators we use, however I would not just rely only on these numbers to make investment decisions. The data however does reveal that this market is very strong internally and that all the bears and doubters are going to either get killed if they short this market for any extended period or miss out on some serious profits. The market has really become a stock traders dream come true, as you have to now know which sectors and what stocks to buy. Just randomly buying a basket of stocks could be very painful financially. 

look at EELN, it released spectacular results and then proceeded to correct severely as the market rose. What makes this market even more tricky to play is now traders and investors must know how to deal with the currency issues. In the 1990 era this was not a big issue. Now with the competitive currency devaluation mentality that every nation has adopted, one has to be very careful. Take the South African gold stocks, those that did not look at the South African Rand early this year were killed as they loaded up on Gold stocks thinking they would all go up. Many analysts were busy pumping DROOY, but look what happened Drooy was butchered with many of the other South African Gold stocks. The astute investor who was able to see that the Rand was in an upward trend was able to divest from his South African holdings into American gold stocks, which appreciated several times more than the price of Gold. This appreciation in the value of Gold stocks more then made up for the dep reciation in the currency.

Inflation can actually be a very good thing, if you know how to play this game. The problem or the benefit of inflation is that its effects are not uniformly spread. So while the dollar has dropped due to the massive inflation of the money supply, Individuals salaries have not moved up to keep with this inflation, however real estate, Gold stocks and many commodities more than made up for this difference. The smart Investor can use these subtle signals to his advantage and reap huge benefits. When I talk about inflation, I am not talking about prices rising or not rising. Inflation means increase in the money supply and has nothing to do with price increases. Increasing prices are the result of inflation and not a definition of inflation 

Remember to win in the market you have to be in a position that is against the Hive and be ready to jump out when the crowds get in. To make a killing, means someone or a lot of someone's must lose in order for you to reap those great gains. There is no free lunch in the markets. It comes to the principle eat or be eaten. 

This newsletter has no fixed schedule sometimes 4 might be sent out a month at other times 1-2. Its not a quantity issue but a quality issue. I would rather send one a month with facts and interesting info then 10 a month with mumbo jumbo.