If You Think Worst Is Over, Take Benjamin Graham's Advice

There are no green shoots.

The illusionists are out in force, concocting lies to save their sorry behinds.

It will unravel. Slowly but surely. I have no doubts.


"It is sometimes said that to be an intelligent investor, you must be unemotional. That isn't true; instead, you should be inversely emotional.

Even after recent turbulence, the Dow Jones Industrial Average is up roughly 30% since its low in March. It is natural for you to feel happy or relieved about that. But Benjamin Graham believed, instead, that you should train yourself to feel worried about such events." MORE HERE

When fools rush in...

The current stock-market rally is the fourth significant rally in the past six months. As you can see in the chart below, the current rally has not had any more power (a steeper slope) or duration than previous rallies, each of which failed to be sustainable and each of which ended in steep decline. In fact, it was at the end of an even longer, eight-week rally (red circle at top left of chart) on October 9, 2007 that the current downtrend began, reaching a low of -58% thus far. The best-fit channel of the highs and lows of all four rallies is consistent with our expectation of a resumption of the decline to lower lows in the coming weeks.

MORE HERE.

Dollar Index already starting to trade below key support levels

Under USDX .8200 the wheels of hyperinflation start turning.

Under USDX .7200 the impact of hyperinflation is visible to anyone who can see.

Under USDX .6200 the Quantitative Easing madness hits the fan

Under USDX .5200 Zimbabwe economics now being practiced become a US dollar condition moniker.

Stocks Going to Moon?

Jeremy Grantham was one of the few forecasters to call the crash, He was also one of the few to call the bottom two months ago--publishing "Reinvesting While Terrified" on the exact day the market bottomed... MORE

US Banksters and the eventual road to ruin

The Big Picture

From The Business Insider, May 1, 2009:

Now that stocks have rallied nearly 30% off their low, pundits agree: It's a new bull market. So be very afraid.

Market punditry is a lagging indicator, not a leading one. Pundits are excellent at describing what has happened, not what is going to happen.

But doesn't the 30% rally off the bottom obviously mean that the bears are fools, that it's finally safe to get back in the water? No. It doesn't obviously mean anything.

First, the "mega-bear quartet"--an overlay chart of the bears that began with the DOW in 1929, the NIKKEI in 1989, the NASDAQ in 2000, and the S&P in 2007. The last one, the current bear, is the blue line. The horizontal axis is time from the peak, measured in years.

If you're feeling confident that the 30% rally means that happy days are here again, take a look at the humongous rallies in the NIKKEI (red) and NASDAQ (green) that happened at this point in the process. Then look at what happened afterward:

Take a look at the charts, from Doug Short. (Check out the interactive version here >)