S&P still forming inverse head and shoulders, China stocks time to shine?

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S&P forming reverse head and shoulders

S&P 500, SPX Hammer Candle Yesterday

Global Meltdown

Credit to C.Green at (www.mymoneyuniversity.com)

As previously communicated, the Euro zone has expanded into a global
meltdown. Keep in mind that they do not have the facility (like our Federal
Reserve) to resolve liquidity and confidence problems by independently
printing more money to "satisfice" the investment community. Risk is being
taken off the table more and more, and any rises in the markets can be
mostly attributed to short-covering (how I characterized Friday's rise) and
bottom fishing. My suggestions is to stay net to at least 50% cash, and
ONLY buy on BIG dips in sectors we like in China and dividend stocks in the
consumer non-cyclical sector in the US, using wide bands at support levels
and dollar-cost-averaging.

The meltdown can't last forever, and eventually the market will recognize
some very good values. I believe the risk is lower in China with the best
growth level and growing middle-class. Keep your thinking caps on and don't
disengage from the market. There is as much to learn from down markets
about risk and reward as there is about up markets. Continue to build and
maintain your watch lists for the best opportunities when you deploy cash.
Down markets can be effectively managed with these strategies. I would
suggest that you revisit the Play To Win section of the ebook (The Money
Game) for perspective the current market climate.

If you have stocks in your 401k or 403b, I would reiterate to be in all cash
or at least 50% in cash to mitigate the current market climate. Our basic
tenet in the Play To Win Club and IFP is to actively manage your accounts to
reduce risk and increase potential returns -- and WE DO NOT ascribe to "buy
and hold." This is not your father's stock market anymore, and will MUST
adapt our investment strategy to the zeitgeist of our time. Let the market
go where it wants to go, just stay ahead of the curve and don't try to
guess. Refer to the ebook or call me if you have questions about what you
should be doing now in accordance with you own circumstances.

S&P 500 forming reverse head and shoulders?

WallStreet Journal Article on Crude Oil Futures is Dumbfounding...

http://online.wsj.com/article/BT-CO-20100513-714137.html?mod=WSJ_World_MIDDLEHeadlinesEurope

That is a link to the article . Here is what I don't Get in the article...

"Nationwide, U.S. crude-oil stockpiles are at their highest since December, and inventories at Cushing have risen for eight straight weeks, putting the amount of oil in storage at the hub at 29% above year-earlier levels."

"It was just last week that crude oil hit an 18-month highs $87.15 a barrel. Since then concerns about the impact of Europe's debt woes on global growth and a broad aversion to risky assets have shaved more than $13 off futures prices."

Seriously , what the heck.

So this journalist is telling me that Crude inventories have been rising for the past 8 weeks and the market didn't care about rising inventories and kept bidding up the price of crude as it hit a high for the year last week. Now all of the sudden the market gives a crap about rising crude oil inventories because of the EU situation??

I'm a buyer of this dip in crude oil. The market hasn't cared about rising inventories for the past 8 weeks(and for all of 2009), and when this sell off is over the market will go right back to not caring about rising crude inventories and oil prices will rise again.

Am I missing something here, short of the EU going into a double dip recession, EU demand for oil won't diminish that much. I'm thinking the author of this article must have shorted oil recently and needs oil futures to go down more.

I'd like to thank him for giving me good oil stocks on the cheap now that are sure to benefit from recovering USA consumption and increases in China and emerging markets consumption.

Maybe I'm missing the point of his article.

What the heck???

Emerging Markets currently underperforming develped markets, but are they ripe for a comeback?

After being red hot for virtually all of 2009, Emerging Market stocks have been grossly under-performing the DOW and S&P 500 since the beginning of this year.

At the beginning of this year most Emerging Market stocks were priced beyond perfection. China started to apply the brakes on growth. The U.S. started to show signs of life. And investors flocked to U.S. stocks which were still attractively valued.

There has been a lot of uncertainty in the market recently, mostly arising from the potential collapse of the Euro. Mature Developed markets are getting more and more squeamish. And the DOW's volatility has risen so much recently, it's somewhat acting like a high beta low float stock. Put together all of that and couple it with most U.S. stocks being near their 52 weeks highs and "poof" the market has taken money off the table. The U.S. markets were ripe for a pullback.

All of the above could lead to the eventual flocking of investors back into Emerging Market stocks. Most of which are now down significantly off of their 2009 highs and attractively valued.

Here is a Y-T-D comparison chart of emerging markets compared to the Dow Jones Industrial Average.