#1 FREE Swing Trading Strategy and Stock Picks for Day Traders

For the past twelve months the economy has been in a period of transition. The days of rising housing prices, low energy prices, and moderate food prices are gone. Consumer home equity is now depreciating, retirement accounts are eroding, savings are losing their purchasing power, and disposable income is diminishing. The FED reacted by drastically reducing interest rates, and took extraordinary steps to reduce the downward pressure on the banking industry. Market pundits had turned bullish, when they thought the FED has saved the day! Certainly economic opinions, during a period of transition, can vary widely. From "expecting strong growth in the second half of the year" to "the economy is already in a recession". Yet, all this talk does not change the facts. Housing prices are plummeting, energy costs are soaring, low interest rates are eroding savings, and disposable income is still diminishing. Opinions are often biased on the "glass is half full, or half empty" syndrome. In other words people are bullish or bearish because of their perception of the economy, the country, the world. And of course, there is always political bias, and self-interest bias. After personally observing the markets for over 40 years. I have learned there is only one opinion that counts: the market itself. Let's review the last few years and determine what the market was predicting in relation to housing, energy prices, commodity prices and the stock market.

Housing stocks were in a bull market until mid-2005, and then started to decline into a bear market, which was confirmed by OEW analysis in early 2006. That's a full year before anyone even noticed there was a problem in the housing market in 2007. Crude oil has been rising since 1998, when it was $10.00 a barrel. When the US invaded Iraq it was $25/bbl. It reached nearly $145/bbl recently. OEW confirmed every leg of this ongoing bull market. Commodity prices as measured by the old CRB (CCI) have been rising since 2001. This new bull market was confirmed by OEW in 2002. Yet only now, in 2008, are the rising prices beginning to impact economies worldwide. The US stock market had been bullish from 2002 - 2007, when it doubled. Despite some steep corrections, OEW remained bullish until early 2008, when a bear market was confirmed. Again, like housing, crude and commodities, it may take a while before this bear market becomes obvious.

The markets are a discounting mechanism. They discount all the possible scenarios, and then move in the most probable direction. OEW quantitatively determines what that probable direction is by confirming the long term trend of the market. Some trends can last for a few years, others for over a decade. In the end market opinions are just opinions, and only the markets matter. If you are interested in learning OEW feel free to email me at caldaro@msn.com.