2011Sep19 Call a Plumber!!

Call a plumber, we have Greece in the drain, lots of it !!

        
All major indexes were down in the two percent range this morning. The news from Europe is not good and not improving. The European Union, European Central Bank and the International Monetary Fund are all looking for a way to stave off a Greek default.

Greece is in danger of not getting its latest and much needed bailout payment. Without that payment they will be forced to default on at least some of their outstanding bonds. 

Some parts of the German government now believe that a default would be the best thing, all things considered. Angela Merkel does not share that opinion and still states that a default must be avoided at all costs. Time will tell. 

Economy:
            
Today President Obama outlined his plan to pay for the job creation he hopes to get through congress by November 23RD.
He is proposing 1.5 trillion dollars in tax increases along with about three trillion dollars in reduced spending.

Most of the savings are coming from winding down the wars. He made no proposals to fix the ailing Social Security system.  

Just as it was with the debt ceiling debate, there is little agreement between the parties on how to proceed. It appears that we are in for another prolonged party line fight.  Hopefully at some point we will have some faction looking out for our best interests, but we would not count on it.

Markets:   
            
 Another day, another two percent market swing. In fact, it has become more likely for stock prices to make large swings - on the order of 3 percent or 4 percent - than it has been in any other time in recent stock market history, according to an analysis by The New York Times of price changes in the Standard & Poor's 500-stock market index since 1962. 

So what's causing the rise in the big bounces?

It's hard to know for sure, but market analysts point to new types of souped-up computerized trading and extraordinary global economic turmoil - from protests over a second bailout for Greece to the downgrade of United States debt.

It is more important than ever to maintain a disciplined investment strategy. Using Point and Figure analysis in conjunction with Relative Strength gives us the tools we need to make better investment decisions. It allows us to follow the money and weed out the background noise that is so loud today.