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

Hundreds of economic and stock-market indicators exist, but many won’t be relevant – even if you could decipher them.  Here are a few stock market indicators that are both reliable and readable to everyday investors.

U.S. stocks just capped off their strongest two-week performance since 1938. The Standard & Poor’s 500 Index is surging toward its third straight week of gains, something it’s done only three times since the bear market in U.S. stocks started 78 weeks ago.

And the Nasdaq Composite Index has erased its year-to-date losses and is now is up for the year.

The path of least resistance is now higher,” Miller Tabak & Co. LLC equity strategist Peter Bookvar told MarketWatch.com, citing such factors as not-as-bad-as-feared economic reports, optimism over Obama administration economic fix-it plans, and a recent jump in commodity prices that “has done