Today more and more investors are warming to the fact that psychology moves markets and therefore fundamental analysis, which fails to properly measure mass investor psychology, must be flawed.

Who can blame them? After all, fundamental analysis — based on past company earnings, rating agency projections and the like — proved to be of little value during the bust.

There is a better way.

Many investors who monitor investor sentiment readings, study Elliott wave patterns and employ other powerful technical indicators were — at very least — able to position themselves to survive the recent decline. Still others were able to turn crisis into opportunity and profit from the volatility.

How’d they do it?

Technical analysis.

You see, technical indicators remove the cloudy, bias-driven assumptions from your analysis and focus on the one thing that moves markets: investor psychology.

Past performance is not indicative of future results …

The following is a joint effort by me and Edward Hugh and if we are both individually prone to writing long and (sometimes excessively) winding entries a combination is bound to be long and ugly; well, the former at least. Surely, it seems, in Macro Man's words that the ECB may have had one of those Damascene moment as interest rates were cut by 50 basis points yesterday. It was not the actual 50 point cut which was largely expected, but rather the ensuing comments by Trichet. In particularl I took note of the fact that now it is not only falling energy prices (disinflation) being mentioned, but also downward pressure on prices from falling domestic activity.

Obviously, the discussion which we hope to initiate here comes in two phases. First, there is the question of whether or not the ECB should be considering QE at all? I

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Japan moving toward $200 billion-plus direct buying of ETFs to stimulate economy.  

 

In the United States, exchange-traded funds served as a key measuring stick for bond traders last fall when trying to stimulate liquidity as credit markets froze. 

Now, the Japanese government is apparently about to turn to ETFs to do much the same with its stock market.

Reports from several wire services Thursday are pointing to an article in the Yomiuri Shimbun newspaper's morning edition that regulators are debating asking the Bank of Japan to buy stock ETFs to prop up the country's ailing markets. 

Leaders are also talking privately about enticing the bank to move forward with the plan by offering government financial support in the case that any losses result from such a move by the BOJ, according to a Reuters report. 

The article also noted that the Japanese paper cited an unnamed ruling party official saying

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strongThe Ruble Devaluation Continues/strongbr /br /The ruble fell the most in nine years against the euro this week after the central bank widened its trading band twice and allowed the currency to fall by a further 3.8 percent, following last week's 1 percent devaluation. The currency retreated to a maximum of 5.8 percent over the week, although it recovered somewhat and was up 0.1 percent again today (Friday) over yesterday, trading at 39.1772 per euro at midday in Moscow. The currency has now fallen 16 percent against the dollar since the start of August, and added another 1.3 percent to its losses today, hitting 27.8412 per dollar and falling 1.1 percent (to 33.1020) against the currency basket which is targeted. The ruble thus lost 3.9 percent to the basket this week, in the process experiencing its sixth weekly drop.br /br /br /strongForeign Exchange Reserves Continue To Decline/strongbr /br /br /Russia’s ...