Dollar Fibonacci Fans

The rules of investing are totally different than they have been the last 30 years. We are in an ongoing world-wide debt crisis, which is likely to turn into a systematic breakdown in faith of government. Your focus should be on learning how to preserve wealth, especially if your investments are in any of the western currencies, and in cash.
For U.S. citizens the focus should be on the dollar index.  If 76 fails, then the next support is around 74.15.  Under that is the ultimate low of 72, and it would be very bad for 72 to be breached.  Think of 72 as the dollar's last stand. 

As of February 22nd around 10:00 pm EST the dollar index is holding 77.65.  Since November 30th, the dollar index has been following Fibonacci fan lines down.  This fan is based on a trace of the June 7th, 2010 daily high to the November 4th, 2010 daily low.  As long as the pattern holds, the dollar is going down long-term.

Cost of Oil

West Texas Intermediary (WTI) crude oil jumped up again today.  It is important that I remind you, that per the Federal Reserve Board of San Francisco "For each $10/barrel increase in oil prices, the United States pays an effective "tax" of about $50 billion (5 billion barrels times $10), or 0.4% of GDP."  But with our leverage, roughly calculated, each dollar move up in oil wipes out about $100 billion in U.S. GDP.  The current Banking-Treasury-Administration partnership won't allow for a significant drop in GDP at this stage.  Can we avoid a vicious cycle where more Federal Reserve "Quantitative Easing" is necessary to offset each reduction in GDP, reducing the value of the U.S. dollar and thus indirectly raising oil prices further, and on and on?

Of course oil prices should turn back down after things calm down in the Middle East, but timing is the issue.  The analysis provided by most media sources makes this point, but I think that matters are far more complex than that.  While I don't pretend to have a handle on all of the correlations and interactions in our global economy, I do have data that tracks the U.S. dollar, oil, and gold prices in response to the Fed's Quantitative Easing and Permanent Open Market Operations (POMO).  Some of the relationships are not obvious and could be disputed, but time is showing us otherwise so far.

Tough to Find Good Values

I've been having a difficult time finding equities that don't have sky high price/earnings ratios.  I look at price to earnings ratios (otherwise know as the P/E ratio) as an indication of how expensive a share of any particular company is at any point in time.  This is simple math taking the market value (price) per share and dividing it by the earnings per share over the last twelve months.  Most financial sites do the math for us, so there's little in the way of doing this.  As smart investors we want to buy stocks when they are cheap relative to their earnings, and sell them when their earnings falter significantly, or their stock prices reach unsustainable levels.