Recession Comparisons

I saw this chart somewhere and I was saddened by the fact that my parent's generation has experienced three of the worst bear markets this century during their parenting and retirement years. What's further foreboding is the fact that we're only at the halfway point of the tech crash of 2000-2002, which many consider to be a very "light recession".

The coinciding damage of the stock market and the real estate market does not bode well for our near future prospects. I wish I had seen this chart before settling my family into our current residence. There should be some great deals out there in the next few years, if not already. It was further surprising to see the (small) long term returns on real estate. I guess it just goes to show how much of the herd has a short memory.

Second Wave of Mortgage Defaults Coming

In my above average joe search to find out how we got here and where we're going, I've stumbled across a video that I want to share.

Our problems to date have been blamed on subprime mortgages. There are many out there who believe that a second wave of mortgage defaults are coming... in the form of Alt A loans. This would be a devastating "Round 2". Buckle up and watch the "60 Minutes" videos below:

Part 1: http://www.youtube.com/watch?v=5IeixTAzhjE

Part 2: http://www.youtube.com/watch?v=Kin1fxZAJZE

Where to Invest?

Oh where oh where to invest. Stock market scary. Real Estate ugly. Fed cut rates again to almost 0%.

Meanwhile, The Federal Reserve assets increased to $2.312 trillion this week. My thoughts:
- Dollar is going to weaken significantly.
- Deflation/depression/recession next year or two at minimum
- High risk of another market collapse moment that could drag down GOLD.
- Fed puts even more dollars into the system, albeit "pushing on a string".
- If fear subsides, we'll have super inflation and high interest rates.

I still strongly believe in GOLD and want to buy on any big dip over the next year or two.

GLD Watch - 12/18

So GLD finally declined for a day. Daily chart says there may be some short term weakness as people go into hibernation for the holidays. 80 is my target, 75 would be a gift.


However, weekly chart seems to indicate that we're going to break out and go up fast and furious.


I think I'm going to try to pick some GLD up tomorrow or next week.

GLD Watch 12/15

Dangit, I got greedy and waited too long. Weekly chart shows that it could be breaking out. The weird thing is that the ADX hasn't crossed over yet so maybe there will be a slight pullback... if we're lucky. The problem is that Gold articles are popping up with high popularity. Or maybe this is just short covering.


I find the P&F chart misleading sometimes as a predictor, but it shows an interesting breakout. Note the large number of headfakes in the recent past.


Best case for the daily chart is a double top like in early October. But with the recent news of the dollar falling, that seems unlikely. I'm undecided as to whether or not to start a position here.

What is Money?

The world changed officially late September with the fall of Lehman Brothers. Of course, 99.9% of people probably don't understand why, myself included. So I decided to do some research on the internet to try to figure out why.

What I found was both enlightening... and downright SCARY.

I'll try to post everything I found over time, but I believe that it starts with understanding what money is.

This video is 50 minutes, the first 30 minutes are very informative, the last 20 are a bit more opinionated, but still informative. But I believe it will change the way you see money. This is the foundation to why I believe that Gold is a "must-own" for an investment portfolio. Watch the following video with an open mind:



Another link to video here

The main website is: http://www.moneyasdebt.net/

GLD Watch 12/09

Well, we didn't get the decline I had hoped for. Right now, it looks like 70 is wishful thinking. At best, it looks like a lot of choppy price action (similar to June?) for the next week or two. Waiting too long could also mean missing the run up. I'm seriously thinking about taking a small position here.


To be frank, there could be significant downside here also. Those who don't see Gold as anything then another commodity would argue that Gold has a long ways down as it has held its value so far during the crisis. Deflationary fears have been driving the prices of other metals down.


My instincts and research say its more then just a precious metal... it's rare... it's tangible and unlike paper money, it's withstood the test of time.

"Under the rule of the Roman Empire at the time of Christ (1st Century AD), one ounce of gold would have purchased a Roman citizen his toga (suit), a leather belt, and a pair of sandals. Today two millennia later in the west, one ounce of gold will still buy a man a suit, a leather belt, and a pair of shoes. Nothing has changed." - Unknown

GLD Watch 12/05

Gold has really been on my mind lately, so I thought I'd start a GLD watch. I'll discuss "Why Gold?" in a later post, but right now I'm just hoping to catch the ETF when both the weekly chart and daily chart signal "buy". I'm not an expert technician, but know some high level stuff, courtesy of stockcharts.com. I personally like RSI, Bollinger Bands, MACD, ADX.

Weekly Chart
From the weekly chart below, we can see a heavy decline (aka buying opportunity) over the past few months of turmoil, with strong support at 65. MACD shows that we might be close to a trend reversal or maybe another false alarm. RSI says we aren't overbought which is good. ADX shows we are in a slightly growing downtrend. Overall, it seems like there could be a a good entry point soon.


Daily Chart
The daily chart on the other hand suggests that we have some downside in the next few days or maybe weeks. If it holds, that could be a double bottom or a higher low, which are bullish signs.

Looking at the Bollinger Band, I'm guessing there will be some consolidation soon maybe around 70 and 72, so I'll be trying to buy some in this range... guessing early next week if there's hangover selling from the unemployment numbers.

Am I being too greedy or too early? Time will tell.