The Market Oracle Newsletter Issue #12 Vol. 1

Welcome to the current issue of the Market Oracle Financial Markets Forecasting and Analysis Newsletter featuring a selection of the Editor's choice of the best articles of the week.

1. Thoughts from the Frontline - The US Mortgage Market - Overexposed and Overrated
2. Can A Major Stock Market Top Occur Here?
3. Fade the Futures Gurus, Gold Futures CoT 2
4. China, U.S.: The Strategic Economic Dialogue as a Tool for Managing Relations
5. Financial Markets Timing Signals You Must Watch!
6. Going Ballistic: The Hard Facts about Parabolic Spikes Such as China's Stock Market
7. Dow Theory Introduction and Basic Tenets
8. The Ballistic Brazilian Bovespa Stock Market Index
9. The NEXT foreign stock market to blast off ...
10. What's New
    

By: John_Mauldin

In this issue:
The Chinese Hedge Fund Dragon
Turning Nuclear Waste into Gold
Overexposed and Overrated
Housing Is Weaker than the Data Suggests
Planes, Trains, Automobiles, and We're #30

This week we look at the US mortgage market to see what fallout there is from the subprime mortgage woes. It is both less of a problem and/or more of a problem, depending on your perspective, as I predicted it would be last year. Score one for your analyst, which said score is needed as the stock market continues to rise in spite of my concerns in the face of a slowing economy.

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By: Robert_McHugh_PhD

While the following charts are meaningless for predictive purposes, what they do tell us is we currently have a price pattern set-up eerily similar to the price pattern leading up to the January 2000 major top in the Dow Industrials .

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By: Zeal_LLC

Adam Hamilton writes: I have loved reading my entire life, so when I am not studying the financial markets one of my favorite pastimes is reading great fiction. My favorite genre these days is the rich adventure/action stories spun out by brilliant authors like Clive Cussler, Jack Du Brul, and James Rollins. A good book makes even the very best movies seem like shallow grade-school plays by comparison.

Adventure stories often have history woven in as the heroes chase after some priceless artifact. Usually some ancient priest-type caste existed that hid the artifact away to protect it from a calamity in the past so our heroes can unlock its secrets in the present. These historical priests often used special knowledge that only they had, usually scientific in nature, to cement their power in the society.

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By: John_Mauldin

As the forth largest economy in the world, the rapid growth of Communist China' military, and economic prominence has both perplexed and intrigued the United States. Stratfor analyst Rodger Baker addresses the two primary economic concerns troubling Washington and Wall Street alike: the Chinese-U.S. trade imbalance, and the floatation of the renminbi, currently pegged at 7.8 Yuan to the dollar, though allowed to fluctuate 2-3%.

Washington has identified the currency dilemma as the primary obstacle to improved U.S.- Chinese relations, concluding that the removal of the currency peg will not only permit U.S. exports to be more competitive but also shrink the current trade imbalance.

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By: Money_and_Markets

Larry Edelson writes: A couple times a year I like to give you my roadmaps of the markets. They are based on actual signals from my computer models. I watch these signals very closely because they tell me when a fork … speed bump … or U-turn is coming in the markets.

They are critical signals, and they should not be ignored. They're not always right. But after 30 years of developing and fine-tuning my system, I can safely say that the economic models they are based on are right far more often than they are wrong.

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By: Doug_Wakefield

Living through a mania is supposed to be a once in a lifetime event. For example, the French, who lived through the implosion of the Mississippi Scheme, and the English, who lived the South Sea Bubble collapse in the 1720s, did not see the same parabolic rises again during their lifetimes. Or for a more recent example, consider the parabolic rise of the Nikkei to its all time high in 1989, the aftermath of which has since changed the disposition of the Japanese toward their stock market. As we mentioned in The Nikkei: Raiders of the Lost Ark , Japanese nationals have a different view of their stock market than foreign hedge fund managers.

“Although there is a problem in that its [ Japan 's] stock market is supported primarily by foreign investors, Japanese nationals make up 95% of its government bond market." .

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By: Christopher_Quigley

The Dow theory has been around for almost 100 years. Developed by Charles Dow and refined by William Hamilton, many of the ideas put forward by these two men have become axioms of Wall Street.

Background:
Charles Dow developed the Dow theory from his analysis of market price action in the late 19th. Century. Until his death in 1902, Dow was part owner as well as editor of the Wall Street Journal. Even though Charles Dow is credited with initiating Dow theory, it was S.A. Nelson and William Hamilton who later refined the theory into what it is today. In 1932 Robert Rhea further refined the analysis. Rhea studied and deciphered some 252 editorials through which Dow and Hamilton conveyed their thoughts on the market.

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By: Gary_Dorsch

Higher prices for commodities from coffee to soybeans and iron ore to crude oil, have brought new found wealth to Brazil. Since the election of President Lula de Silva in 2003, Brazil has emerged as a major player in global trade, and its currency - the real, has climbed by 70% against the US dollar, with a trade deficit shifting into a massive surplus. The Bovespa index on the Sao Paulo Stock Exchange reached a record high of 52,750 this week, and is up 18.2% so far in 2007.

Brazil economic output rose to $1.6 trillion last year, or half of South America's GDP, and making it the ninth largest economy in the world. Brazil occupies half the South American continent, contains half of its population with 200 million, and is the fifth most populous country in the world. However, there are vast disparities in the distribution of the country's land and wealth, and Brazil has the greatest number of people living in poverty in all of Latin America.  

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By: Money_and_Markets

Martin Weiss writes: My global team and I aren't in a race to pick the world's leading stock market.

But right now, the star performer happens to be my personal favorite: Brazil. (And soon, the spotlight could shift to another market I'll tell you about in just a moment.)

Back in January, I told you Brazil was primed to be another "China-like miracle ." I explained why Brazil is one of the greatest beneficiaries of the China boom .

And I told you how Brazil's ethanol explosion would help propel the country even further.

Plus, two weeks ago, I gave you a heads up that Brazil would soon be upgraded by a major U.S. rating agency.

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• Editor's Choice - Quick links to the best 3 recent articles.
• COT Reports - A new section is under development that will publish weekly committment of traders reports. This will include both charts and analysis.
• Best Articles - A new section that lists the best articles over the past month per topic is under development.

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