The Fool, or the Fool Who Follows Him

Everywhere you turn you will hear "this is a great buying opportunity".  DON'T BE FOOLED!  The best buying opportunities occur at market bottoms and we are no where near a bottom.  How do you find a bottom you ask?  When a chart carves out a bottom, you will usually see a period of what is called accumulation.  Accumulation is a period of time where you see a period of time that price moves horizontally before a breakout and run up.

In case you were wondering, the following is a real chart example of accumulation and distribution.

Wesa people gona die?

Very very frightening times right now folks.  Check out this video by Peter Schiff which explains what is going on with currencies and credit ratings.

Rates, time will tell

     this mourning I posted what you can expect from a downgrade of a country's credit rating.  durring the trading day we saw prices rise on tresuries while yields fell.  This is the opposite of what I said was going to happen.  Over all, was I wrong?  Time will tell.
     What I think happend and is going to happen is that prices rose while yields fell because of an overall rise in volume.  Once volume dries up, I expect yeilds to rise.  I cant say how high they will go, but I deffinately think that yields will rise.

Why I Agree with S&P

     One of the reasons that you will not find a single middle eastern country with a high credit rating is because of the overwhelming potential for political volatility.  Not to say that the U.S. is on the verge of major regime change, but things are so partisan that no progress can be assured.  Congress came within hours of not being willing to pay its debt just a week ago.  Its not that there was a question of whether or not the U.S. could pay its debt.  The point is that there was, and still is a question of whether or not they will be able to agree over what needs to be done and pass legislation in a timely manner. 
     Not only does it appear that some people in congress are willing to allow a default, but they promptly went on vacation after "accomplishing" an agreement to raise the debt ceiling while cutting spending in amounts that appear to only be a drop in the bucket.  That's right folks, congress gave themselves a pat on the back after coming to a deal that does nothing to solve the problem.  The deal that they agreed to merely slows the debt curve instead of making a meaningful change in direction.  That is why I agree with S&P's decision.