This is a guest contribution by Damien Hoffman, editor-in-chief of the very popular Wall St Cheat Sheet blog. Make sure to put this site on your must-read list.

Nouriel Roubini and His Acolytes

Following the incredible popularity of my post “Is Nouriel Roubini a False Prophet?“, I’ve decided to do a little introductory lesson for those more interested in avoiding charlatans …

Cold Reading is a primary set of techniques employed by phony psychics and market prognosticators. When cold reading, the primary objective of the sender is to ensure that the recipient perceives the statement/prophecy to be a hit. Here are a few classic techniques used by Ms. Cleo and Nouriel Roubini:

TECHNIQUE 1. The “Rainbow Ruse”: Indicate one trait

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Since the publication of my new ebook WHEN 10 IS GREATER THAN 90 I have received numerous reviews and feedbacks.  Here are just a few of them:

“As you already know from reading me, the concepts you outline here are things I very much believe in as well. From trading the probabilities to developing a specialization, I think you’ve covered a lot of great material. I also love the analogies and quotes you provide to back up your views. Great job.”

Charles Kirk,  The Kirk Report

“The new E book by The Cross Hairs Trader, “When10 Is Greater Than 90″ shows you a complex theory in simplified laymen’s terms.  Whether you are a seasoned trader or a first time novice, this book will open your eyes to how complicated most trading systems can

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This post is a guest contribution by Charles Kirk, author of the popular The Kirk Report.

I’m always looking for ways to improve my trading and, in recent years, I’ve been reading more on applied sports psychology. The reason? The principles offered by many of those who study sports psychology can be applied directly to trading.

Dr. Bob Rotella is a famous sport psychologist for professional golfers (including Padraig Harrington). Recently he wrote an interesting article in Golf Digest offering 10 Rules to help golfers achieve better performance. The concepts outlined there are as helpful to a golfer looking to win as it is to a trader looking to achieve peak performance in the market. To see what I mean - let’s review each of Bob’s 10 rules and my own interpretation of Bob’s comments as they relate directly to trading:

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  “ALL WARFARE IS BASED ON DECEPTION.”  SUN TZU

Whether you like it or not “all stock trading is based on deception.”  Don’t believe me?  Ask yourself the following question and answer honestly: have you ever lost money trading when your trade was based on a well-known stock market pattern that did not work?

Let’s look at a recent example:   Those who were short the recent bearish S&P head-and-shoulder pattern were left scratching their heads as they were forced to run for cover.  Even the financial stations were fixated over this technical pattern that predicted a dire future for the market. Alas, as the right shoulder formed and the S&P crossed the 200 SMA an amazing thing happened: the market went up 7 days in a row!

Let’s take a look:

A BEARISH

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“Words from the Wise” this week comes to you in a shortened format as I do not have access to my normal research resources while on the road in Europe (also see my post “Gone A.W.O.L. - to Slovenia and Switzerland“). Although very little commentary is provided, a full dose of excerpts from interesting news items and quotes from market commentators is included.

While investors’ hopes of an economic recovery might have got ahead of reality, the cartoonists continually reminded us of worrisome issues …

Source: Signe Wilkinson, Washington Post,  June 18, 2009.

The past week’s performance of the major asset classes is summarized by the chart below - a mixed bag so to speak.

Source: StockCharts.com

A summary of

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If you appreciate sound trading advice, detailed analysis, and disciplined consistency,  then Charles Kirk’s THE KIRK REPORT should be at the top of your daily reading list.  Mr. Kirk delivers a premarket report and an after market report (usually within 2 hours of market close) each trading day.

BACKGROUND

I recently had the pleasure of interviewing Charles Kirk. His 17 years of experience really shows in the thoughtful answers to the questions that follow.

Mr. Kirk’s site provides his own focused trading advice (hence his site’s tagline “one pro’s view of the stock market”) with numerous daily links to trading news and market insights.

He provides a FREE SERVICE and a MEMBERS ONLY service whose annual fee -considered a “donation” -is less than what most people spend on food for two days.  These

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One of the definitions of “stress” offered by the Merriam-Webster dictionary is “bodily or mental tension resulting from factors that tend to alter an existent equilibrium”. Well, any bodily or mental tension investors might have been suffering from as a result of financial factors were shrugged off on Thursday with the announcement by US regulators that ten of the nation’s largest banks had to add a total of “only” $74.6 billion in equity following the completion of stress tests. However, whether this will indeed restore the equilibrium remains to be seen.

Source: Walt Handelsman

The diagram below, courtesy of the Financial Times, summarizes the stress test results in a nutshell. Click here or on the image below for a larger graphic.

Source: Financial Times

As investors welcomed the

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“Words from the Wise” this week comes to you in a shortened format as my traveling in the US precludes me from doing my customary commentary. However, a full dose of excerpts from interesting news items and quotes from market commentators is provided.

On Friday, Federal Reserve regulators have released a white paper outlining the criteria they used to assess the financial health of the nation’s 19 biggest banks. On the same day they also briefed the banks about how their companies had fared in the examination. The banks will have until Tuesday to dispute any of the results before they are made public on May 4.

According to the Financial Times, senior Fed officials said US authorities will ask some of the country’s biggest banks to raise more capital following the completion of bank stress tests. The officials also indicated

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Jeff is traveling, so we are republishing his recent interview from the Kirk Report, one of our featured sources.  The Kirk Report is an excellent investor resource, with many specific stock ideas for members.  Charles Kirk also reads very widely and provides regular links to articles we might otherwise have missed.  He came up with some excellent questions for the interview, getting Jeff to discuss many topics he has not covered on "A Dash." Here is the Kirk Report interview: It is with great pleasure to have Jeff Miller, from A Dash Of Insight, to participate in this month's Q&A. Many of you know Jeff because I've linked to many (if not the vast majority) of his blog posts. In this Q&A we'll cover a variety of topics ...

It was only a week ago that we found No Sectors to Buy in the ETF universe.  The picture has changed swiftly and dramatically.  There are now many choices in our "buy" range.  The signal strengths are solid and getting better. It is a surprising result in a week when the S&P 500 declined by almost 4%.  We have a lot of respect for signals in many sectors from our TCA-ETF model.  These are discoverd through examination of Trends, Cycles, while using a touch of Anticipation.  (For new readers, there is a more complete description of our methods at the end of the article.) Looking for the best sectors to buy, we were a bit surprised at the results.  That is what a model should do -- alert you to opportunities that you might not see on your own. Featured Sector:  Back ...