Bernanke’s comments recognized that the problems appear to be structural and not short term. That’s great but it’s been shouted at him and the administration for a long time.

Announcing that The Federal Reserve would keep interest rates where they are for two more years is actually depressing emotionally. It shows no expectation of recovery or the potential for a problem we, the public, don’t know about.

Both signals from the Fed Chief say basically they don’t know what to do…which is not what gets stock markets moving.

Stability and a clear action plan (leadership) would allow the market to look forward. Normally my glass is half full. I am feeling right now that my glass is half empty because there is no leadership that does more than state the symptoms of illness. What we need is a leader who can tell us what the illness is – not the symptoms’ – and what actions are being done to heal the patient. Only then can we move forward.

The illness is well defined. Our Politicians are not addressing it.

We have too much debt and waste in Government and we have too many regulations choking small businesses.

Aug 4, 2011 Administration Adds 608 Regulations — Just in July! By Paul Bedard, U.S. News and World Report

Stocks are poised for a huge rally on news of a tangible and specific action plan. When that leadership comes is what we are waiting for.

From a good source who would know, I am hearing that Homeland Security is preparing for domestic terrorism and civil unrest similar to what is happening in Greece and London. That is, just in case it was to happen here. Perhaps it has already begun.

This is not uplifting I know. I am trying to interpret the situation as I see it and state it accordingly.

Our problems are not that unique. There are real solutions but it seems no one is willing to take the action to deal with them on a national level.

Do not misread my belief in and for the stock market. It is where the greatest opportunity lies for financial freedom and independence. It is just frustrating to believe you know what the problem is and not see our elected officials take action to solve those problems.

This is a great time to buy stocks! How do I know? Because I am down emotionally on the stock market and that does not happen often. When it does happen, we usually have a big rally.

Go stocks!

LOTM has a strong interest in Emerging Markets. We believe a good way to keep track of Emerging Market trends are to follow people who are established leaders in the field.

Mark Mobius is just such a person. We suggest matching country ETF’s technically to Mobius comments. If the ETF has a technical chart pattern that matches the outlook suggested by Mobius, a trade might be considered.

Here are some of his recent comments:

Mark Mobius on India, July 29, 2011

Recorded interview on CNBC TV18 India’s No. 1 Financial Portal – Believes equities will rally as the U.S. debt ceiling issue passes behind. In the emerging markets, Mobius like in the following order Russia, China and Brazil. Asked why he did not mention India, his reply was that he like India’s growth but at this time, India was fully valued and had a high degree of corruption. In time, he felt growth would take care of the valuation and he hoped that the government would deal with corruption.

List of India’s ETFs

Small caps suffer more in a rising interest rate environment (happening now in India) than large companies do so you might look at a short sale on SCIF – Market Vectors India Small Cap Index. The chart pattern looks tired and below all three major moving averages (50, 150 & 200)

Mobius on US Treasuries no longer a safe haven:

“The debt crisis in the U.S. and Western Europe puts emerging markets in a very strong position because their debt to GDP ratios are much lower than the developed countries and their foreign reserves are greater than the developed countries.”

Mobius believes a shift is under way towards emerging market stocks and said that he was bullish on commodities and gold.

LOTM Comment: In the short term, we think the dollar might rally with a debt ceiling deal. We not take a position against the USA Dollar at this time but stalk it for a better opportunity.

Philippine Daily Inquirer July 26, 2011

Philippine stocks getting expensive: Compared with emerging market peers, Mobius said the Philippines was at the middle of the pack in terms of certain benchmarks like real interest rates on deposits, corporate governance based on the United Nation’s human development index, and degree of economic freedom. “We believe in commodities, whether it is nickel, iron, ore and coal, that is where the Philippines’ potential is,” Mobius said. Given the incredible natural resources in this country, Mobius said, it was odd that there were not too many of those big mining companies around.

ETF Philippines Investible Market Index Fund (EPHE) $26.10

LOTM Comment: Extended technically but still in a strong uptrend. This uptrend is likely due to an inverse action (decline) in the US Dollar. We suspect that if/when the US dollar rallies the shares of EPHE will correct. Looks interesting on a pullback but nimble traders might consider a short sale here when the US Dollar rallies.

“Men of experience succeed even better than those who have theory without experience…If, then, a man has the theory without the experience, and recognizes the universal but does not know the individual included in this, he will often fail to cure; for it is the individual that is to be cured.” –Aristotle

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