The Rain In Spain . . .

April 16, 2012

The briefing was updated early this morning and can be found in The Briefing Room. Also, anyone who would like to look at previous emails can go to my blog. You can also access the risk and return analytics of our models here and sign up to be updated after each new blog post.

Last week we spoke about those who would tell us something in order to manipulate us. As it turns out, the newly elected Spanish government is ratting out the old Spanish government and the lies they were telling all of us about their economy. We thought they were in a tough position, but according to the new information, their woes are nearly twice as bad as we thought. Thanks John Mauldin for the heads up.

Spain was getting charged over 7% when it borrowed. This amount was considered unpayable by many. Then the European Central Bank printed over a Trillion Euros which in part was given to Spanish banks which in turn lent the money to Spain. This brought their borrowing costs down to a respectable level. Everyone thought this massive money printing process would allow the Euro Zone a year to get things together. Unfortunately with the new info coming out of Spain, the markets have begun increasing the interest rates already. This last week saw rates hit 6% and there is fear it will continue increasing.

Spain's economy is said to be too large to save. Greece was simply a small domino that could begin tipping others. Spain is the domino that could break the entire system. It is certainly affecting our markets in the U.S. again. This last week we've had some pretty good news entering earnings season. Each time we get good news though, we get another piece of bad news out of Europe to dampen it. The markets are trying to digest the two.

The briefing this week shows the difference between buying retail vs wholesale. Our goal is to sell positions at retail (near resistance levels) and buy our next positions wholesale (near support areas). We know we will never be right all the time and we attempt to mitigate the risk of being wrong intially by taking smaller initial positions. Over time, this system keeps losses smaller without capping gains. It is a simple approach, but not always easy. Please take a look at the briefing for the full scoop.

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.