Markets and EconomyWARNING

For the small investor, 5-25K

Watch your stops, and if anything tighten them up. The things I watch show danger in the market. The worst is the volume, and secondly is the insane insider selling of stocks, the highest in at least a decade. You cannot ignore insider buying or selling because you won't be an insider for long if you are wrong. (See note at end)

Reasons? The economy is growing like crazy, so where are the jobs? There cannot be a "jobless" recovery except in the Left Wing brain. Consumers are buying stuff. Who is making the stuff? Why are people who are supposed to make the stuff we are buying being laid off? We are going to start hearing next week that it is U.S. tax policy favoring only the American rich that is growing the economies of China and India. That our profit hungry greedy capitalist corporations are "outsourcing" all manufacturing to foreign countries, particularly Asia. They will point to the "suspicious" rise in the Asian economies as proof. That is NOT proof. There is no hard data. But the Left never sleeps, and there is the possibility they are right.

This is serious stuff. Where are the jobs? You cannot afford to be a Lefty or a Righty with your investments. Pay attention to the data you are using, and as I've said many times I am a William O'Neil man and use his system exclusively, and that means you get out of markets STRICTLY on technicals (charts). You can always get back in. The name of this game is always to preserve capital, and profits are like chips on a poker table: they are yours. Profits are your capital. Keep them.

Another point: this is the first time in history we have tried to combat a recession while we are in a WORLD ECONOMY. The first time that everybody in the world owns corporations everywhere. There is a POSSIBLITY that "outsourcing" is why there is a jobless recovery, meanwhile stay the course.

Now some really interesting stuff. EU crops are a disaster with yields off twenty percent on average across the continent. Guess who has a cornucopia (French for shit load) of grains, hogs, cattle, and so on? I have lost faith in the Bush administration to play hardball with the French and Germans. I have not lost faith in our high tech farmers to play an eight man line. All of them have computers in their barns, all of them are in the futures markets, and they will close out their hedges and keep their grain for higher prices. As Russia (worst grain harvest since the 30s) squeezes our balls over energy we could let them starve. This is an opportunity to bring down energy prices for this winter. We can cut off grain to Russia unless they pump more oil. We can cut off grain to Germany and France unless they play ball on Iraq. My OPINION (and you don't trade on opinions ever), my opinion is that Bush is too gutless to use food as a weapon. Go HERE for a report in the English language that you can understand. Most of the stuff I have is in market gibberish and proprietary.

This is a golden opportunity to get GE grains to Africa and end starvation there. I think Bush doesn't have the stomach to do that either. IF you are a futures trader you are already long corn and you can get long wheat on Monday if the market doesn't gap up. If you are in stocks I told you here in July to buy things like ADM and Carghill if there were buying ops and you got out last Tuesday. You might look for a new opportunity, don't just buy them. We could easily see $3.50 corn and $4.50 wheat. Soybeans at $7 are a real possibility. Coffee is going up, the meats are going up but it's too late to chase them.. Low commodity prices were a part of the deflation fear; that fear is over.

Be careful, we could be in for a major correction. The market overall is fairly valued.

Note Insider activity is like the Commitment of Traders reports in the commodities markets. You always pay attention to what the Large Speculators are doing in commodities markets because you don't remain a Large Speculator for more than a week if you are wrong. I always tighten my stops if my trades are opposite the Large Specs. Same with Insider selling in stocks. Watch your ass.