Most of Asia closed up with the exception of China.  The Yuan test continues as China is actually being proactive and testing what its merchants can sustain in order to gauge the approach the Chinese central bank will implement to fight inflation.  China continues to be the largest owner of US debt.  Many penny stocks are coming out of China. There are many reasons to follow China with the aforementioned ranking close to the most important.  We have released several stock picks of Chinese companies in the past. Europe is trading up today with the exception of Switzerland.  The world markets seem to be skipping along with the nice move in the US markets.  So it’s easy at this point to look at the current issues the US financial markets face and take a very bearish attitude and call for huge market correction because of a huge over valuation in stocks.  There are always a litany of justifications and fundamental or technical arguments these economists will come up with.  Other than 15 plus years experience in almost every capacity in the securities business, I base my current premise on the prevailing direction the DOW will trend on one thing that I’ve noticed recently, HOPE.

Yes, HOPE is the prevailing indicator that leads me to look at long term option positions on DOW futures contracts 1-3 years out from 12,000-15,000 respectively from 2011-2013.  The fact that there is actually hope in the third world to increase the living standard of those that have the least is starting to bridge the income disparity gap.  Central America, South America, Africa, Malaysia, and Indonesia among other countries are all in various stages of expansion based on the exportation of non-durable goods.  These staples of life increase the employment of those that are willing to work for the lowest wages but have skill sets to fit the work.  As the business grows and tasks become more complicated, a supply to demand variable in available skilled laborers increases the wages that are earned by the working class.  As in the textile boom in the United States where we replaced the UK and Europe as the nexus for skilled production, there is a similar revolution occurring in these locations, but it is based upon non-durable goods exportation. Some of the next hot stocks in the stock market are coming out of Latin America and Asia.

Traversing the EU landscape is quite difficult and looking for penny stocks in Europe as it is full of quicksand, xenophobia, far right nationalism, far left radical cells, centrist mouthpieces, landmines, and far worse. How would anyone ever think that a group of countries that have invaded one another, fought against, alongside, hated each other, made peace, only to begin again, committed war crimes/atrocities in the last decade, then take into consideration all the unique cultures mashed together and you have a powder keg for disaster. Surprisingly, didn’t the EU see that the real trade enemy was not the “Chinese at the Gates” dumping product? In fact, the undoing of the EU may come at its own hand. Hot stocks can still be found.

While traveling through Europe in September and October, I couldn’t help but notice some interesting things that were going on. Well, Switzerland doesn’t belong to the rest. I have to say that I always say the Swiss run everything the same way the second hand of a ROLEX ticks perfectly on your wrist. Switzerland is always a step ahead of the game already knowing all possible outcomes and what it risks in every scenario. Well, France and Italy, I discovered, were nothing close to Switzerland. It’s a given that there will be groups of French, who enjoy getting the best of Jenson under their breath while enjoying the safety in numbers principle. And I say bless them, they were so kind to give us Champagne, Croissants, Universal Surrender Techniques, and 101 ways to prove to yourself that philandering is okay. I’m sure you can find a lot of stock picks with popular products derived from France. There was a deeper need to be upset with me for having had the audacity to be AMERICAN, so I had to look deeper into this. The fact is that beyond Societe General the bank, I am not that excited about France’s economy as they suffer the same affliction many of their Socialist counterparts… Labor Unions and the retirement packages they have secured. I guess when you have entire parties in these countries driven into office by unions the lobbyists have some power. However, in a country quickly losing its ability to remain competitive compared with emerging competition from countries where forming unions is punishable by firing squad, there is very little light. You can’t have an aging population, full pay and benefits for life, and generally poor standards until your 800 pound gorilla is standing on your head relieving itself. Keep looking for hot stock picks.