Hang On Tight!

Janaary 30, 2012
	The briefing was updated last night and can be found in The Briefing Room. Asset Allocation and Diversification offer false hope (helmet) of protection from the market (trap) when all you want is a little return (cheese) The Baltic Dry Index tracks shipping between countries.  Anyone who buys products in America knows that most of what we buy comes off a ship.  This index came to my attention in 2008 because it dropped just prior to the market drop.  It also bottomed and began going up about a month before the market bottomed and began going back up in March of 2009.  It makes sense to me why it is a leading indicator.   The reason I mention this today is because this index seems to be falling off the chart in the month of January. Baltic Dry Index over the last year Baltic Dry Index bottoms in late 2008 and begins going up.  The stock market didn't begin going up until March of 2009. I like this index because I am suspiscious of government reporting.  We get "headline" economic reports that say we are in a recovery, yet these reports get revised a number of times over the ensuing months.  These revisions don't make the headlines. This index tells us straight up what is going on with shipping.  If shipping drops off, it tells us people aren't buying as much.  75% of our economy is me and you buying stuff since manufacturing has dropped off in this country.  When we stop buying, recession sets in.  Bottom line - this index is falling dramatically and it has a tendency of telling what is going to happen next in the market.  So Hold On Tight! As of today, Greece still hasn't put a deal together.  Greece's troubles are rubbing off on Portugal.  Portugal was downgraded to junk bond status by Standard and Poors.  They had to pay 15.2% interest for a 10 year loan (bond).  Can you imagine that?  It only gets worse with shorter term loans.  The 5 year costs them 22% and 2 year 19.2%.  These are records in the european market.  Whats the problem?  The investors think they may be the next ones asking for a deal.  This world has a tendency to eat the week.  These extreme interest rates only make Portugal's problems worse.  Remember the domino theory I've talked about in the past? Please visit the briefing room to get our take on current market conditions and how we are planning to adjust our portfolios accordingly. Have a great day!! John Norquay CEO PivotPoint Advisors		In order to view the graphs and charts in our newsletter, please click the link at the top of your email to "always show images from PivotPoint Advisors" Resources Check out our Youtube Channel  Like our FaceBook FAN Page We manage money inside 401k plans. Know anyone who may want to use us? Click "Forward to a friend" (immediately below) to share this newsletter with friends you think may appreciate our services. Forward to a Friend Twitter Subscribe to the Weekly Briefing Report Unsubscribe Update Subscription Preferences View Email In Browser