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There are various opinion currents in the technical analysis. One of the recent ones appeals to the natural order of the markets and to uncovering patterns which appear from time to time. This approach to technical analysis does not try to find models where there is none. Rather the natural order trading is trying to catch patterns as they emerge and ride them for the benefit of the trader. These things said, “Harmonic Trading – Profiting from the Natural Order of the Financial Markets” is a book which uncovers several such patterns for the benefit of the trader.

Scott Carney, founder and president of a company called (surprise surprise) “Harmonic Trading”, has studied quite a long time these patterns. His experience started with the Fibonacci approach, a trading method which uses the Fibonacci numbers to predict the most probable incoming price levels. This is a probabilistic approach and, like all the methods based on probabilities, it chases patterns where over the long term you are more likely to offset losses with your gains (rather than the other way around).

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I was reading recently an article regarding the imminent bankrupcy of the emerging markets (especially the ones from Eastern Europe). The author said in his investment blog that banks are now forcing up the interest rates in those countries. The increase in the interest rates would lead to a wave of personal bankrupcies in those markets, allowing the foreign investors to buy the local assets (especially the real estate assets from those emerging markets) very cheap. The scenario would be unfolding as we speak, whilst the peak of the crisis in the Eastewrn Europe should arrive somewhere in the middle of 2010.
The fallacies of this story are many. I will not enter into the details of the cosnpiration theory which seems to hide behind this pessimistic approach to the Eastern Europe economies. I will also not discuss here the fact that it is hard for the big banks to cooperate among them. Or the bank cooperating with the big investment funds, their competitors, would be a highly unlike - ier scenario. I will just mention the recent lessons that Dubai and Greece, two sovereign countries, whose recent developments are linked tot tourism and real estate investmentst, taught us.

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Mr. Keynes, one of the most respected economists of al times, the one who’s doctrines are still running many countries, has once remarked: “Blessed be our nephews, becasue they shall inherit the national debt”. In the same manner, they shall inherit the outcome of our investment strategies and fortunes, so why not start now in a positive manner?

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In the recent volatile markets investors remained with huge amounts of cash withdrawn from the volatile stock exchanges around the world or from selling (hopefully high) their mortgages or real estate properties. Of course, as any normal US investor, this huge amount of cash raises some serious issues: first of all a bank deposit cannot guarantee any longer a good return over the long term, secondly a bank deposit can be neither safe, as the recent news continue to prove (yesterday for example the Dutch government has injected $13,5 billion in the famoun European ING bank in a desperate attempt to keep it floating).

What to do then? Well, structured settlement payments can be one solution. This financial instrument consists in the client selling its settlement (potential or actual) to a specialised company and receiving back a lump sum of money - or an anuity, based on a negoatiated contract. Structured settlement payments look a lot like factoring, whereby you sell some uncertain future revenue for a certain present stream of revenues. It is like trading risk for return instantly.

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Recently Starmine published a top 10 of the brokerage houses in Europe, based on the number of awards they obtained in 2007-2008. Whilst this is not a 100% performance accuracy predictor, it says something about the process quality of these brokerage houses:

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As anticipated in our previous posts (unfortunately), shares continue to decline today on all the major markets, especially in Europe and Asia. There is an old investment adagio which says that “No news is bad news” (Ernest Hemingway, “For Whom The Bell Tolls). In this particular case, no good economic news means bad news for our shares investments.

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