| Decline in the value of the American dollar |
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| December 11, 2007 |
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The Trickle Down Effect
It all starts with INTC — the box makers the router makers and the gadget makers.
That’s right—when INTC is fully revved up, the chip rally will have official “lift off” and the rest of the tech stocks can take off right after. And ladies and gentleman, we’re VERY close to starting our rally engines! You see INTC is currently going on a 3-year high — a clear sign that the rally and the “trickle effect” has begun.
Remember, this is a cyclical rally—it only comes every four years—so you have to jump on board as soon as it happens. Typically chip cycles last 8–12 months after they begin. Get “in” at the beginning to increase your profit chances at the end.
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If you’re a frequent reader of Trade Talk Weekly, you know that there’s been heavy rotation out of commodity related sectors, especially GOLD and OIL. And for good reason…these sectors are extremely overcrowded. Why is that? They happen to share the honorable distinction wherein many of the same traders responsible for this overcrowding are also busy shorting the US Dollar.
Now from what the charts tell me, the $USD only has one way to move, UP. Sure—everyone believes that there has been a decline in the value of the American dollar has been going down because the Fed has been cutting rates. No one can blame the masses for that assumption. Nope, this time the onus is singularly on the Fed. In fact, I’d say this is one of the biggest lies the Fed has ever perpetuated.
For those non-believers, I invite you to take a closer look at the $USD. The truth is that the Dollar has been dropping for more than six years. Since mid-September, the Fed has cut rates three times. But the rate cuts have NO impact on any $USD decline. So what’s really happening with the US Dollar?
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Sector Rotation
Sector rotation is the practice of shifting assets from one market sector to another in hopes of beating the overall market. I’m not a big fan of sector rotation, because the market isn’t static, it’s constantly evolving. And as Dr. Janice would say, people are moving from a linear to a logarithmic society due to the pace of technological advances, yet our brains are the same way they were hundreds of years ago.
So when it comes to analysis of cycles, a lot of things are subjective, and that’s why cycles are not a big part of Trending123. Nevertheless, when compelling sector plays come along, I don’t mind taking advantage of them.
That’s why I’m urging my subscribers to grab chips before they skyrocket. But at Trending123, we don’t put all our eggs into one sector. There are eight other areas that look good on the long side, and 10 I’ve started counting down to sell. Join Trending123 now to get all the sector plays with the most bang for your buck.
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- The United States has a lot of debt with or without rate cuts. It doesn’t take a math whiz to tell you that if you spend more than you save, debt is a foregone conclusion.
- We play “big brother” to the world by spending billions of dollars per day saving everyone else’s country while we ignore our own.
- For years, the banking/lending sector has been on a free money giveaway to anyone that wanted to borrow. (I warned my Trending123 subscribers long ago before “sub-prime” and “dodgy debt” even became a household name.)
Now that I have dispelled a few myths about the debt problems of the United States—and you know where to draw the line when it comes to trusting the Fed—it’s time to turn your attention to a more valuable topic. The chip rally. It’s right at the tipping point—the perfect time for you to get in.
Sincerely,
John Lansing
Trending123
P.S. What has Trending123 been up to this year? So far we have closed 113 trades — winning 85 and losing 28, for an astounding winning percentage of 75.3%. Better yet, we’ve averaged an 85.09% annualized gain on each trade (winners and losers included)!
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