A Lot of Bull
The Well-Timed Strategy for Week Ending April 24, 2009
by Peter Navarro, Ph.D.
April 10, 2009

Market Pulse

Sorry for not sending the newsletter last week. Had a big trip back to the East Coast for a couple of speeches.

That said, we’ve got the Dow roughly back to where it was when I first said over a month ago that the Dow would fall from 8000 down towards 6000. Well, it got as low as 6500 so that was a pretty good call.

And speaking of good calls, several weeks ago as the latest bottom was bottoming I speculated that taking some in- or near-the-money positions in January 2011 leaps in the likes of GE and Dupont might be prudent speculations. So far so good on that.

As to why the market seems to be bullishly bouncing, the technical character of this market is now bullish, with Market Edge signaling an “Early Entry Buy” for the Dow and longs for both the S&P 500 and the Nasdaq. Of the three, I like the Nazz the best and moved a chunk of my 401K into that a few weeks ago.

Our eternal question is whether the technicals are matched by improving fundamentals. I think it would be most fair to say that while we are not seeing much improvement, we are seeing some stabilization in the economy. Still, big questions continue to loom as US debt levels will be soaring, Europe remains the weak global sister, and Asia is likely to escalate its beggar thy neighbor practices to boost its fortunes.

THE CHINA EFFECT

Please see my latest You Tube report.

© 2009 Peter Navarro

“Any trader or investor who ignores the power of macroeconomics over the world’s financial markets will, sooner or later, lose more than they should and if they are trading on margin, perhaps more than they have.”-- If It’s Raining in Brazil, Buy Starbucks

Peter Navarro is a business professor at the University of California and the author of the best-selling investment book If It's Raining in Brazil, Buy Starbucks and The Well-Timed Strategy. His latest book is The Coming China Wars: Where They Will Be Fought, How They Can Be Won.

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