YOU'VE HEARD IT BEFORE -- BUY LOW, SELL HIGH AND PROTECT PROFITS

Here at Hill And Street News, we have written that our stance was to ease into gold when the prices were right – and then to take profits along the way as gold moved higher. It is a stance that has worked.

But when things are going right, there is always the tendency to get cocky. It is impossible to know precisely how far folks will carry individual sectors or the market in general to the upside or downside because emotions are such a huge factor. But the goal must always be to remain watchful over true economic facts (and we believe that US economic problems are not all solved – the farther the US dollar falls and gold soars, the greater the negative impact on our nation’s economy) and to try to anticipate what will happen in the future, all the while taking advantage of current opportunities – acting when prices are right, taking profits along the way.

We believe that it would be a mistake to pump serious money into such an extended market when economic problems are not yet all fixed. But we will continue to look for long-side opportunities – easing into them at the right prices and taking profits along the way.

IMPORTANT READING

UN PANEL TOUTS NEW GLOBAL CURRENCY RESERVE SYSTEM, Breitbart

UN SAYS NEW CURRENCY IS NEEDED TO FIX BROKEN 'CONFIDENCE GAME', Bloomberg

U.S. DISPLACED BY SWITZERLAND AS MOST COMPETITIVE, Bloomberg

CHINA ALARMED BY US MONEY PRINTING, Telegraph.co.uk

UN WANTS NEW GLOBAL CURRENCY TO REPLACE DOLLAR -- IMPORTANT READ

The dollar should be replaced with a global currency, the United Nations has said, proposing the biggest overhaul of the world's monetary system since the Second World War.

U.N. WANTS NEW GLOBAL CURRENCY TO REPLACE DOLLAR -- CLICK HERE TO READ

AFTER THE LABOR DAY WEEKEND

Friday closed at around the best levels of the day. The S&P 500 remains technically okay, although the move higher on lighter volume following the bigger volume move lower could be a warning sign.

But the larger picture will be the G-20 meetings, including who holds the positions of leadership and the chatter around the continuation of the US dollar as the world’s reserve currency. There is a lot that can impact currencies, a lot that can impact the US dollar. That's all important.

Over the really, really long-term, we like silver and gold. But talking “now,” we have believed it prudent to incrementally take profits along the way up. In the markets, remember, once again, that the trend is your friend until it is not. And there always comes a time when the wind shifts the other way.

We believe that over the really, really long term, gold will go higher – but this is looking way ahead. And we believe that crude oil will go higher too.

But what is critical is “now” – making the right moves now to increase profits and to hang on to those profits. So we watch the winds and make small moves accordingly. Even if we believe in "higher" way down the road, there is time between now and then -- and market can go considerly lower before it goes higher again. There are the yellow warning flags that must be watched -- so we want to make the right moves now to be in a better position for some time down the road.

WEEKEND READING

WALL STREET PURSUES PROFIT IN BUNDLES OF LIFE INSURANCE

TELECOM MARVELS, OCRegister

WHY DO INVESTORS SIT TIGHT IN 401(k)s?, Wall Street Journal

RETHINKING STOCKS' STARRING ROLE, The Wall Street Journal

CAREFULLY EXAMINING THE FED'S ACTIONS, The Wall Street Journal

WARNING: THE DEFICITS ARE COMING, The Wall Street Journal

HOW AND WHEN WILL THE GLOBAL CRISIS END?, cnbc

ECONOMIST SEES SLOW RECOVERY, The London Free Press

GOLD WARNS OF DOLLAR WEAKNESS, Incredible Charts

A SEPTEMBER FOR GOLD, Mineweb

FRIDAY -- WITH A HOLIDAY WEEKEND AHEAD

Most of yesterday was quite flat – but that squeeze that we mentioned as a possibility happened during the final hour yesterday, giving the market the kind of strong finish that we have seen often over the past few months. Although volume was not heavy, the Bulls were able to finally get something going.

“The U.S. jobless rate in August jumped to 9.7 percent, the highest since 1983, and employers cut another 216,000 jobs, highlighting threats to consumer spending,” reports Bloomberg.

Trading may be choppy today -- given the strong finish yesterday, the Bulls may be able to take the market higher today. But remember, too, that if there is a gap up, it can also fade. So keep a vigilant eye.

We will be watching the market winds closely – still sticking to the pattern of small moves. The holiday weekend generally means that many traders and investors are off for some fun with family – and light volume can lead to some whippy action.

THURSDAY, KEEPING A SHARP EYE

After some pretty ugly action lately, the S&P500 did give up a bit more yesterday on above average volume – with major Indices finishing just a bit off their worst levels. Over the past few days, strength has been sold. But, still, there has been no real technical damage and uptrend remains intact. There has been no evidence that the dip buyers have gone away. And it appears that there will be a higher open today.

We have often spoken of our keeping an eye on the precious metals, believing that gold could reach about $1,000 an ounce. And the goldminers have performed as expected.

We will sound like a broken record – but, once again, we believe that it is important to keep an eye on the $USD. The dollar has been showing weakness, and the thought is that investors have been looking for the safety of gold.

We will watch whether this morning strength gets sold – and there is always the possibility of a squeeze here.

Be careful out there.

WEDNESDAY -- COMPUTER PROBLEMS FIXED

Yesterday was a rather ugly day as traders once sold good news -- and there was huge volume into the close. Financials were hard-hit as folks showed their concerns about the real health of banks. Commodities go hit with the exception of precious metals. And while the S&P 500 remains in its uptrend, this was still all of this action was worrisome for the Bulls.

At Hill And Street News, we have had an uneasy feeling about the market for weeks. We believed that at minimum, the market needed desperately to consolidate. But we have also been concerned about economic problems that remain unsolved.

Is this the consolidation that we have needed -- some profit-taking was destined to happen. Or is the market actually showing some more serious deterioration here? The huge volume off highs hints at institutional selling which is a bit worrisome. But technically the market is still in an uptrend.

We still believe that any moves should be small as we wait for better signals of where the market will go from here. Be careful!

FRIDAY -- TECHNICALLY ALL IS WELL, BUT WE WATCH THE MARKET WINDS

Yesterday the major indices were relatively unchanged – and some folks were looking at defensive names. Hmmmm. Anyway, in looking at the charts, there is no real evidence of the market rolling over, and the S&P500 is technically okay.

We have been calling for consolidation – some of that gentle churning action. And, indeed, the market has been churning this week which is a good thing. But we still believe that there needs to be further consolidation for the market to make any significant move higher.

And, quite honestly, having said all of that, we still cannot get from the back of our minds that those nagging economic problems are not all solved – and eventually such things at some point always seem to come back to haunt. It is our belief that the picture is not as rosy as some folks would like us to believe.

Once again, it seems that the right thing is to take advantage of opportunities when we see them.

And it seems the right thing is to keep an eye out there always sweeping, looking for the moment when folks start to worry significantly that the market winds will shift.

THURSDAY -- LAST LAZY DAYS OF SUMMER

While the market has been getting some pretty decent news this week, but hasn’t soared off the news – that does not necessarily mean that the Bulls are losing control. Players are still searching for trades, and the trend remains with the Bulls.

However, having said that, we still believe that there are plenty of critical economic problems remaining to be solved – and, in the end, unless they do get quickly solved, at some point they will be a focus again.

The market is acting a bit tired – which makes sense. But some sectors have still been attracting attention and action, such as the biotechs.

At the moment, we are enjoying summer days – and will be on heightened alert for signals of which way the wind is going to blow. It is hard to sit on hands and, while we believe some rare good set-ups can still be found, we are not eager to be doing anything too gingerly. There will be opportunities – and, quite frankly, we want prices to come to us.

PROTECTING GAINS IS ALWAYS A GOOD THING

The reappointment of Ben Bernanke as Fed Chairman and a better-than-expected consumer confidence report prompted folks to move the major Indices to the highest levels of the year – before later giving up some of the gains. However, the action was decent – and the dip-buyers once again were hanging around.

Thus far the market seems in decent shape – and the Bulls are still in control.
However, we believe in keeping a sharp eye out there – and think it prudent to tighten stops and be rather ambitious in protecting gains.

THE TREND IS YOUR FRIEND

The US markets moved higher in early morning trading yesterday, but the gains slowly disappeared when traders decided that it was time to take some of their profits off the table.

Ben Bernanke will have a second term as Chairman of the Federal Reserve, and the market, of course, always likes continuity. This plays into the hands of the Bulls who have already been having a lovely time lately.

Stocks are extended, in need of some consolidation – so it seems wise to take some profits and enjoy some of these last days of summer. It is difficult to put too much money to work when we believe both that the nation’s economic problems are not all solved – and the market is extended to the upside.

But the trend is your friend until it is not, and currently the trend is with the Bulls. So the winning hand has been to stay with the trend – remembering that the market can continue in a direction much longer than anyone expects. Folks who have stayed on the sidelines have been left out of the “trend is your friend” rally.

Our view, as we seem to say daily, is to look for good chart set-ups, making small moves and taking profits along the way. There seems no reason to stay entirely out of this market. But it will pay to not get cocky – to remain vigilant. While it might not happen quickly, at some point the tide will turn, and it is never fun to watch profits go away. And the number one rule has always been to protect profits.

THE BULLS STILL HAVE IT THEIR WAY

The market closed out the week rocketing to fresh new yearly highs after a better-than-expected existing home sales report. This was a big win for the Bulls! It certainly felt great, but, of course, now we are faced with the problem of finding new set-ups.

So we will be looking for those set-ups while remaining vigilant over recent gains. Despite believing that a correction will come, not not knowing exactly when that will happen -- our thought is to take advantage of the good set-ups and to contine to take gains along the way. Jumping out of positions a bit too early is far better than staying in them too long.

Some notables: Traders have been selling the China and India US-traded ETFs -- and the market is at levels where, if it does not churn for a bit, traders might begin to take some profits. And, as we have been saying for quite some time, the $USD remains a real key and it will be prudent to keep a sharp eye on it!

WEEKEND READING

WHITE HOUSE TO BOOST 10-YEAR DEFICIT FORECAST TO $9 TRILLION

WHEN THE RICH GET POORER, LOOK OUT BELOW

SMALL INVESTORS FACE BIG HIT IN ETF PUSH

EX-UBS BANKER GETS MORE THAN 3 YEARS IN PRISON

TOYOTA COROLLA STILL CASH FOR CLUNKERS TOP SELLER



GADDAFI EMBRACES LOCKERBIE BOMBER AND THANKS HIS 'COURAGEOUS FRIEND' GORDON BROWN FOR RELEASING HIM

U.K. SAYS AL-MAGRAHI RELEASE NOT LINKED TO TRADE PACK

OBAMA UNDERWRITES OFFSHORE DRILLING. TOO BAD IT'S NOT IN U.S. WATERS

CHINA TRAIN MAKER WINS APPROVAL FOR SHANGHAI IPO

RIO'S SORE SPOT, LOWER SPOT PRICES FOR IRON ORE HIT THE COMPANY'S REVENUE IN THE FIRSDT HALF. WHAT WILL TOMORROW BRING?

WOES ARE INCREASING, THE LOCKDOWN OF CONTINENTAL FLIGHT 2816

FRIDAY -- EYEING PRECIOUS METALS AND MINERS

On Thursday the S&P500 closed at its third highest level of the year – and the Nasdaq posted solid gains. The gains actually took the U.S. market ahead for the week despite what was a pretty ugly Monday.

For the past half-year now, buying pull-backs and dips has paid off and it appears that it will take some unexpected bad news and/or perhaps some failed bounces to change this market mode. Of course, though, our readers know that we believe that economic problems are not all solved – so that there is always the potential for some bad news to emerge.

But right now the Bulls remain in control, seem pretty happy and can claim that trend that is your friend -- so we will continue to look for chart set-ups and be involved in small ways, with a particularly watchful eye on those overhead resistance levels. We are eyeing some precious metals and miners.

THURSDAY -- BULLS STILL IN CONTROL FOR THE MOMENT

At the closing on Wednesday major indices had made solid gains that, together with the prior day's gains, took the market back to about flat for the week. Dip buyers were doing their thing, and the Bulls showed that at least for the moment they remain in control. Most sectors were higher, with greatest gains in energy, health care and basic materials.

We still suspect that there will be more of a correction before too long, but for now the Bulls have control and that must be acknowledged and respected. The trend is your friend until it is not. And we are keeping a watch for such things as lower highs.

In the meantime, we continue to look at charts for set-ups -- and among those that we are looking at are INFY, JNPR and BCRX.

WEDNESDAY

Yesterday the market experienced a decent bounce after two days of poor action. Deere announced lower revenue and profit, but, of course, the numbers beat estimates. That's just the sort of thing that has been happening lately. Volume was not surprisingly light, and while gains did not make up for the ground that had been lost, the dip buyers showed that they are still around.

To speak up on the Bulls side, the S&P 500 has thus far held above 975. The dip buyers are still around and wanting to participate. So far the best that the Bears have been able to pull off have been a couple of down days in a row. And the analysts continue to move the market higher with upgrades of some general favorites.

So until the wind switches direction, it makes sense to look for opportunities -- good set-ups -- and try to take advantage of those opportunities. But until we develop greater confidence, our moves are small and we take some profits along the way.

TUESDAY -- WATCHING FOR SIGNALS

Major indices and sectors other than health care providers ended yesterday miserably. Financials, precious metals and resources suffered the most as folks shifted their interest to more defensive sectors.

While market action never reached a panic, this time the dip buyers were absent, either vacationing, asleep or simply refusing to participate. Of course, we have been expecting this for a while. It was due.

For now, it seems prudent to watch for real signals as to which way the wind is going to blow from here. We will watch to see whether upward action draws sellers taking profits – or whether this ends up being viewed as a buying opportunity. But, as we have said, there is still room to the downside before any real technical damage is done.

WHAT WILL THE DIP-BUYERS DO HERE? WE ARE WATCHING.

Recently we have issued frequent reminders that the market would likely offer better set-ups and better opportunities down the road – which seems to be coming to fruition.

Traders took some gains on Friday, though the market finished off the worst levels of the day.

Today, though, traders were met with some pretty atrocious action in the international markets. And folks are talking about recent weak US economic data.
But the market had recently soared and was, in our humble opinion, in need of a pull-back. And even with some recent churning action, we have felt that the market was overbought, extended to the upside.

It will pay to watch what the dip-buyers do here, but this is just the kind of action that we need to bring sanity back into the markets and provide those decent set-ups that we have been speaking about.