WAMU GOLD
The Well-Timed Strategy for Week Ending August 8th
by Peter Navarro, Ph.D.
August 8, 2008

The Markets

Déjà vu all over again. What I said last week remains in place: All three major U.S. indices remain in a technical sell position. The fundamentals dictating this include an inflation constraint on the Fed, slow growth (if not a technical recession), and a deteriorating global economy – both in Europe and Asia.

Don’t get suckered in by a big up day like we had last Monday. Be patient and keep your powder dry.

And by the way, let me know if any of you out there have tried my Hat Trick strategy in the financial sector – buying WM effectively as an option and building positions in FITB and WB. This seems to be working really well, and let the record show that it was this column that flagged this strategy long before the financial media picked up on it.

I also reiterate my own support for several biotechs, particularly HALO, which is now a Strong Buy according to Market Edge.

Presidential Politics

The media picked up big time on two of the major themes of this column. The first is that Obama is vulnerable on his inexperience and because of latent racism that is unlikely to ever show up in the polls. The second is that Hillary remains the only Democrat bandied about so far that adds to the ticket.

To Obama’s credit this week, he made the rounds talking with a number of economic players, including both Bernanke and Paulson. It was the first time a presidential nominee ever met with a sitting Fed chair. Also in the Obama mix were Clinton’s treasury secretary Robert Rubin and the best Fed Chairman of the last century Paul Volcker. Let’s see if any of this bears policy fruit in the coming weeks ahead.

Quick Takes

1. I got an email from my University of California bosses that my next check might take me back down to minimum wage thanks to the Terminator. The Governator is locked in a game of chicken with the state legislature over passage of a budget and I, along with 200,000 other state employees are now pawns in Arnie’s stupid game. Note to Arnie: You’ve had years to get California’s budget in order and all you have ever done is just pass new bond issues to facilitate the state’s profligate ways. If you were in Texas, you’d be “all hat and no cattle.” A disgrace.
2. So now China has locked up some poor sap who published some photos of the earthquake on the Internet. Repression knows no boundaries.
3. I’m trying to figure out how to go long the Dodgers after they picked up Manny Ramirez. As a baseball junkie, I’m on Cloud Nine.
4. Guess how much its costs to take a yacht to Catalina and back from Long Beach and work in a little fishing. A tennis buddy with a big boat claims it’s over a grand. His 40 + footer gets ½ mile per gallon. That’s right, ½ mile per gallon. When the energy crisis starts hitting the upper crust, you know we are making some progress…

THE CHINA EFFECT

Please see my latest You Tube report.

“Any trader or investor who ignores the power of macroeconomics over the world’s
financial markets will, sooner or later, lose more than they should—and if they are
trading on margin, perhaps more than they have.” -- If It's Raining in Brazil, Buy Starbucks

The Market Edge Market Summary from www.marketedge.com 

CONTACT INFORMATION
Peter Navarro
Irvine, California USA
Email  |  Website

DISCLAIMER: This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling, or holding of any financial instrument whatsoever. Trading and investing involves high levels of risk. The authors express personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The authors may or may not have positions in the financial instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future performance.