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Harry Newton's In Search of The Perfect Investment Technology Investor. Harry Newton Previous Columns
9:00 AM EDT, Wednesday, September 2, 2009: This is the worst month in the stockmarket. No one knows why. But expect the worst. It started yuchy:

In he context of a longer view, it doesn't look out of whack.

And in the context of an even longer view (a monthly chart), it's barely a blip.

Aren't charts wonderful?.

I don't know why STEC fell $4 yesterday. Here's the deal: Its one-year high is $41.75. It closed last night at $36.53. If it falls to $35.49, we're out. That price is 15% off the high. Remember our inviolate 15% Stop Loss Rule.

Will the Administration keep hyping the economy? Should we run for the hills?. My learned friend Frank Derfler emails me:

It seems evident to me that Obama and company are going to "talk up" the economy over the next months. They will spin, spin, spin, any marginally positive news they can find in order to get healthcare and cap-n-trade passed.

They will create a "bubble" for their own benefit.

The second half of the "W" recovery will be long and painful.

The piece below on China is from the ATCA Group... a private and balanced think tank. They don't mention that a weak & inflated dollar will help Obama pay back the monetized debt. He and his friends have all the motive in the world to royally screw the dollar.

Beware the ride -- FJD

From ATCA:

According to our computing systems, China's Shanghai Composite Index has closed down more than 20% on August 31 from August 4 (year’s high), the common definition of a bear market.

It has been the mi2g Intelligence Unit and ATCA Research and Analysis Wing’s joint view that the unprecedented $1.2 Trillion lending by China’s banks in the first half of this year is unsustainable and it has been lengthening the colossal asset bubble in property and stocks in China like in the case of Japan in the late 1980s. Its ramifications are felt in the global commodity markets – from oil to copper to gold. Further, it has acted as a false prop for the global financial markets by giving the impression of a global recovery, based on high commodities demand, which in reality is a speculation bubble based on leverage caused by China’s easy money policies that are now coming to an end. No wonder the state owned China enterprises are preparing the ground for default on commodity derivatives.

What are the consequences of the China markets decline on global financial markets?

Want to be really depressed? Here's Richard Russell of Dow Theory Letters. Please note that he's been a skeptic on the market's huge rise since March. That could be for two reasons. First, he missed calling it. Second, he really believes this stuff. Anyway, this is not untypical of the gloom and doom out.

I believe we've been in a bear market rally since the March lows. When this rally ends, the decline in the market should be unexpected and precipitous. Stock prices will melt rapidly and bids will dry up by the hour. All the bearish force of a primary bear trend that have been "bottled up" will be released. There's no accurate way of telling when a bear market rally is topping out. Much depends on the analyst's instincts and experience.

There have been too many non-confirmations recently for my taste. It's come to the point where these non-confirmations are being ignored. My own instinct is that we're being lulled to sleep by this market. I take this series of non-confirmations seriously. For my own part, I've moved my own account into what I feel is a very conservative and defensive position. I suggest that my subscribers do the same.
I didn't like yesterday's or today's action, both of which had me wondering whether this bear market rally is in the process of breaking up. I note that Bernanke is taking all kinds of bows for what has happened so far (the rally, of course). If the rally is topping out, my advice to Bernanke is to quit now while you're way ahead. You should never have accepted another four years at the Fed. In coming years, a professorship at Princeton is going to feel a lot more comfortable than being Chairman of the Federal Reserve.

I don't know whether people realize the significance of a potential top-out of the market here. If this bear market rally breaks down, it will mean that the Bernanke-Geithner-Obama efforts to halt the bear market and bring back asset inflation will have failed and that deflation remains in the dominant position. In that case, bonds should hold up and gold should stall and possibly break down from its symmetrical triangle. The Bernanke operation to halt deflation has put the US in an incredible debt position, one that I can't figure out how we're ever going to get out of. We won't renege on our debt, we can't possibly pay if off, but we can resort to "the American way" -- inflate it away. In the meantime, Bernanke has literally guaranteed that the Fed won't raise interest rates and his "quantitative easing" (printing Federal Reserve Notes) goes on.

As long as the stock market was rising, the US public felt that everything was "all right" -- a rising market "softens" a lot of sins and anxiety. Bernanke's nightly prayer: "Please Lord, bring back rising asset prices -- let it all move higher except for gold."

Just ask. "Can't you do a little better than that? Times is tough." And bingo, the price drops. Everyone from our cable company to the local hairdresser has dropped their price in response to this whine. If this doesn't work instantly, start mentioning competitors. That'll clinch it. Your cable company is mortally afraid of Verizon's FiOS or Comcast, or whoever.

Harry's latest brilliant idea: Whoever invented the flip top on toothpaste should be shot. Our Sunday plane trip caused the top to pop and to ooze gooey gunky toothpaste everywhere.

My brilliant idea: Crazy glue the flip top. No more spills. I have not patented this idea. You can steal it.

It's all marketing. Part 73: We are a nation obsessed with cupholders. Or at least I am. Now for my greatest "find." Drumroll, please. Spied in Boulder, Colorado, a stroller with two cupholders:

2009 U.S. Open Tennis Schedule: TV coverage of the US Open is around the clock -- presently on ESPN2, ESPN2HD and the Tennis Channel, and then later on CBS. The full schedule is on Here's today:

Watch it on HD. It's better than being there. And much more fun than watching stock prices.

Late night:
"But now here's the deal. When are you a president, you can't do anything. People always looking for you to make some kind of trouble for you. Did you see the picture of Barack Obama out bicycling with the kids? He's not wearing a helmet. And people are all over him now. And I, well, I hope this guy has got some pretty good health insurance." --David Letterman

"I believe the President is the most prominent Democrat to go without protection since John Edwards." --David Letterman

Sarah Palin announced that she will make her first trip to Asia in September, where she'll be giving a speech in Hong Kong. Palin says she's thrilled because Hong Kong and Asia are two of her favorite places." --Jimmy Fallon

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.