I truly expect significant earnings increases for this robust shipping company.

This is a story about a man who jumped from a 100 floor skyscraper.

If you're an index investor, you can do very well by using this tool to measure "fear" in the market.

The mainstream media is absolutely frothing at the mouth about the latest energy news to come out about the United States.

I'm just not sold that the big results from retail this weekend will have a lasting impact on the U.S. market.

The market took a nosedive yesterday, directly to 1197 support. In addition to the plummet, and sadly for the bulls, volume was high.

October 3rd was the first trading day of the month, and the S&P 500 dropped 32 points. Yesterday, October 31, the S&P 500 dropped 32 points. Coincidence? Absolutely.

The stock market always seems to believe best and discount the worst. Any reprieve in bad news is taken as good news. Any good news is good news. No news is good news. Sometimes, even news that is bad, but not AS bad as expected is taken as good news.

Stocks soared higher today as investors get hopeful that Europe may be close to a solution for Greek debt.

The market did not do much yesterday. The indices started the day moving higher, but around noon they fell back and closed in the red.

The decline was entirely expected and needed. Many indices had moved up 6% in two days, so it was natural that they consolidated yesterday, especially with no news.

Now that an actual, much-needed, $450 billion American jobs bill is here, it will be interesting to see how it's treated in Congress.

For the U.S. economy to sink back into recession, or for corporate profits to make a meaningful decline, consumer spending must contract. It really is as simple as that.

And the simple fact is: the American consumer has been steadfast since the financial crisis.

We see the results of consumer confidence polls swing wildly. Respondents can be ecstatic one month, and despondent the next. The last University of Michigan survey showed the worst number since November of 2008.

To QE or to not QE? That is the question.

Whether 'tis nobler in the markets to suffer

The slings and arrows of outrageous inflation,

Or to take arms against a sea of deficits,

And through austerity, end them.

Recently, I sat in on a meeting with the top researchers, analysts and investment gurus here at Wyatt Investment Research. In one room sat many decades of investment experience, two MBAs in Finance, and each person with a specific skill-set that's unmatched anywhere outside of a multi-billion dollar i-bank or fund.

Stocks are up today, so far. Speculation that the Fed will not be able to resist more quantitative easing is putting a floor under stock prices. And the news that Qaddafi is just about defeated in Libya is helping the good vibes.

But clearly, this market will need more than speculation about the Fed and the easing of some geopolitical tension.

We need some economic data to show a little growth, and ease the worries that the U.S. economy is slipping back into recession.

The market declined mildly on Friday. Volume was jacked since Friday was option expiration day. But the price movement wasn't terribly exciting, or even all that frightening.

The selling was steady and persistent, but it didn't look convincing. While stocks declined, very few hit new lows. And the lack of new lows indicates that the indices are forming support zones.

The market action over the past few weeks has been extremely volatile. And it seems like support zones are regained and lost in hours. But SPX is stable around 1115. And hopefully that means it is forming a long term base from which to launch higher.

Growth forecasts for the U.S. are being drastically cut after yesterday's disastrous Philadelphia Fed manufacturing survey. Economists predicted slight expansion, instead we got the worst reading since March of 2009.

JP Morgan (NYSE:JPM), who just cut its GDP forecasts, cut them again. And the cuts are big. From 2.5% to 1% in the 4th quarter and from 1.5% to 0.5% in the 1st quarter of 2012.

Citi (NYSE:C) was less dramatic, cutting 2012 growth from 2.7% to 2.1%. Citi also cut earnings estimates for the S&P 500 by around 4%.

For the first time in over two weeks, the U.S. economy is back in focus. First we got 2Q earnings reports from Dell (Nasdaq:DELL) and Target (NYSE:TGT). Dell missed revenues slightly and offered a weak revenue forecast.

There was a time when Dell was an important measure of consumer and corporate spending. (It's sales mix is roughly 75% consumer and corporate, 25% government.)

And while the company did say the economic environment was challenging, Dell has also missed important trends, like data storage and tablets. We have to think some of the weakness in Dell's numbers are a direct result of Apple's (Nasdaq:AAPL) success...

Investors have been acting as if there is a financial bogey-man lurking out there, ready to confirm the sum of all our financial fears. Is it U.S. recession? Is it European debt? Is it the U.S. debt downgrade? Congressional dysfunction?

Of course, the combination of worrisome events is enough to push investor anxiety into overdrive. But at the heart of the fear in the financial markets is European debt.

Again, yesterday we discussed the rumors that were swirling around France's bank, Societe General...

In 2008, we knew that the mortgage-backed securities depleted the cash reserves at banks to the point that they were insolvent. In January of 2010, it was the uncertainty of Greek sovereign debt along with other European countries that caused a very sharp pull back for stock prices.

But it's more difficult to find a culprit for the declines we've seen lately.

Yes, there have been weakening economic data, to the point that GDP growth may be below the 2% line. That's close enough to negative growth that some are throwing around the "r" word: recession.

The market recovered in a major way. Volume soared as the bulls emerged and took the indices 4% to 5% higher, literally in an instant.

Most indices hit session lows in the early afternoon, and were poised to close lower for yet another time. But in the last hour, the major U.S. indices burst higher to the tune of 7% to close positive.

The big gains from the indices on Tuesday erased most of the loss that occurred on Monday, which was attributable to the credit rating fiasco. Over the past few sessions I cautioned against going short.

As I explained, the market could head lower, but that downside was minimal. And once buyers stepped in a sharp and quick counter-trend rally would ensue. Yesterday morning I was looking for that rally to commence, which is exactly what happened.

Are we in a recession?

The S&P 500 (even with yesterday's huge bump) is still down about 12% from the early July highs.

But... let's back up. What is a recession? Is it characterized by a drop in the stock market? Should it be?

If a bunch of wealthy corporations get wealthier, and a your 401(k) account gets a bump, does that mean we're NOT in a recession?

The market was killed again. I would like to say that I have never seen this intense selling pressure before, but I have, in 2008. Is this 2008?

I can hardly say the economy "feels" any better. And I am sure the millions of unemployed (some of who have been without work since 2008) would agree.

But folks, this is not 2008, or 2009. I am not going to argue with those who think the market goes lower; I do too. But the economy is not worse than 2008, corporate profits are not worse than 2008, and we do not have deflation...

Financial markets like money. When the Fed was pumping cash in to the system via QE2, stocks moved relentlessly higher.

Yesterday's vicious sell-off was a snapshot of a market worried about a lack of money.

The debt deal passed in Congress yesterday calls for $2.4 trillion in government spending cuts over the next 10 years. We looked at some of the impact of reduced government spending yesterday...

High-unemployment continues to plague the U.S. economy.

According to the Department of Labor, the official unemployment rate recently increased to 9.1%. It's tough to imagine the illusion of a recovery extending much longer when millions of people are unemployed.

And it doesn't take a market expert to absorb all of the aforementioned economic data and come to the conclusion that the U.S. economy is in trouble.

So the question as a small cap investor or any investor for that matter is - how can we profit from high-unemployment and a struggling economy.

My favorite counter-indicator just signaled that some of the world’s best resource companies could soon be on sale.

I call it the Geithner-tron or maybe the Timmy-matrix.

And it essentially goes something like this: whenever Tim Geithner says something with a real sense of purpose or resolution, I know that the opposite is true.

The last time my Timbo-whatzit signaled signal went off me was on October 18, 2010. That’s when he dropped this doozy:

“U.S. Treasury Secretary Timothy Geithner vowed on Monday that the United States would not devalue the dollar for export advantage, saying no country could weaken its currency to gain economic health.”

To recap, that was just two weeks before Ben Bernanke unveiled QE2, the Federal Reserve’s $600 billion Treasury purchasing program – a move that can only be described as bearish for the dollar.

I don’t like making serious predictions about commodity prices. It’s generally a losing proposition, so understand that I’m writing today’s article to provide in-print edification of my views.

I’m going to give a specific number in a minute, but the general diagnosis for oil fits into my overarching thesis: nearly all commodities will scream ever-higher in price as world governments treat their currencies like a red-headed rented step-child.

To arrive at my hasty oil-price prediction, I’m going to use a well-worn technical pattern extrapolation known as a contracting triangle.

Forgive my artwork, (I never was a color between the lines kind of guy) but take a look at the chart below to see what I’m working with:

The New Unemployment Claims number is usually one of the last indicators to start improving after a recession. But once unemployment claims start to fall, job growth and strong economic expansion are never far behind.

And today, New Unemployment Claims finally broke through the critical 400,000 level for the first time in 2 ½ years.

I don't write this letter in a vacuum - thankfully my analysis and scrawlings are propped up and influenced by true giants in the commodity investing field. If you've been a reader for very long you probably know that I closely follow the work of the legendary commodity investor Jim Rogers.

Unfortunately, Jim doesn't have a daily blog I can peek at. But I've increasingly been looking at a semi-daily letter published by prognosticator and economist David Rosenberg of the investment firm Gluskin Sheff.

(You can sign up to receive Mr. Rosenberg's letter for free by clicking here now - I strongly recommend it.)

Though he's not specifically a commodity analyst, he's currently a precious metals bull, so I find myself agreeing with his analysis most of the time.

Mr. Rosenberg recently revealed an interesting strategy that I know some of you will be quite interested in.

Last night, Japan did something it hasn't done since 2004. It sold yen to push the value of its currency lower. A weaker yen helps Japanese exports and is a tool for fighting deflation in the country. Japan officials didn't say how much yen they sold, but it drove the dollar 3% higher against the currency.

As we know, a stronger dollar will push oil prices lower. And it will affect stocks, too.

Japanese stocks are up 2% across the board. We'll see if it affects U.S. stocks to that degree. Declines are likely to be short-lived as the market adjusts to the yen intervention. This will be the dip to buy for investors who missed the start of the current rally.

Before I get in trouble - I want to make it crystal clear that I don't have a letter from Federal Reserve Chairman Ben Bernanke.

What I do have is the letter that I would need to see him write in order to convince me to sell my gold and silver and hold dollars instead.

Seeing this letter is not the only condition under which I would sell my precious metals, of course, but since Bernanke is the dollar's Commander in Chief, he certainly has the sway to pursue the types of policies that would turn me dollar bullish.

Without further ado, here's the letter I'm waiting for:

"Dear America,

I'm sorry. I was wrong.

I know - I'm supposed to talk about gold or oil or coal again today. That's what you were promised as a reader of this publication.

I hope you'll forgive me, but today's missive has little to do with commodities.

I read an article that just can not go unmentioned. It's either the funniest and best written nod to George Orwell I've ever seen, or it's a frightening representation of the world we live in.

Before I go on, you should take a look for yourself - it truly must be seen to be believed.

I firmly believe that Ben Bernanke and I share a common viewpoint. We both have no idea what he's going to do four months from now.

There's simply too much uncertainty. We don't know what's going to happen with the multitude of economic indicators and whether they'll spell success or failure for his policies.

So let's back up and look elsewhere for certainties. I think I've found some bullish news for commodity investments.

Why?

As of this writing, there seems to be little chance that President Obama and his colleagues in the Senate and Congress will extend the Bush Administration's tax cuts.

Personally I think taxes as well as government, both state and Federal, should be cut to the bone.

Today's letter has very little to do with an explicit commodities opportunity, but it has EVERYTHING to do with how you should be investing today.

If I could condense my investment thesis into a single sentence, it would be "Boil down the markets into the simplest possible terms, and invest accordingly."

It's a strategy cribbed from the world's best investors such as Peter Lynch, Warren Buffett and Jim Rogers. But that's not why I keep it simple. I keep it simple because it cuts down on the amount of time I would waste researching unnecessarily complicated investments.

For instance, I know very little about the prescription drug business. Johnson and Johnson (NYSE: JNJ) might have the greatest pipeline of revolutionary life-extending drugs in the world, but I'm not a student of bio-chemistry. It would just take too much time for me to do the research on each of their drugs, let alone the standard balance sheet due diligence.

The most important thing for your investments isn't gold or the dollar, or the consumer price index or Treasuries or even the stock market.

It's energy. More specifically, it's crude oil. Oil absolutely dwarfs everything else.

As I wrote back on June 3:

"...in April of this year, a new daily volume record was set on the Intercontinental Exchange (ICE) for West Texas Intermediate Crude (WTIC) contracts - with an astounding mark of 464,381 contracts traded in just that one day. Each contract trades 1,000 barrels of oil.

With oil prices around $84 that day, each contract was worth about $84,000. So, it means that over $38 billion worth of oil contracts traded hands in that one day alone.

I'm going to write today's issue under the rash assumption that we're already experiencing a double dip recession. I think such a recession has important implications for gold and gold investments, for the simple fact that severe downward trends in the broad market usually have deleterious effects on every asset class - at least for the short term.

If it happens again, we'll get another great opportunity to load up on gold stocks as they get temporarily dragged to hell by the broad market.

So, before I tell you what to look for, here's my brief reasoning for why I think we're in a double-dip recession.

Q2 of 2010 is in the books, and the broad market is down nearly 12% over that 3 month period. I'm using the S&P 500 as a proxy for GDP. Typically, stocks in the S&P 500 are a leading indicator for GDP, so it's not a perfect system, but it's good enough for today's discussion.

I know - the usual definition of a recession is: "a decline in GDP for two consecutive quarters" - but if you look at a chart of the S&P 500 over the past two quarters, that definition is small consolation:

Oil investors are looking for any reason for oil to go up in price these days.  We all tacitly know that much higher oil prices are coming. But with the economy in a perpetual cycle of stagnation, continued bad news from Europe, and concerns that growth is stalling in China, oil can’t seem to find a foothold. 

But I believe that oil is one minor war-action away from higher highs this summer. 

That brings me to something my wife and I encountered yesterday. 

I should note, I’m writing today’s issue from a hotel room in Boston.  My wife and I are celebrating our first wedding anniversary this week. 

After spending yesterday afternoon ferrying between Boston’s harbor islands, we encountered what I believe may be the catalyst for higher oil prices this summer. 

In Boston Common, amid the hot dog stands and balloon vendors, hundreds of pro-Palestinian protesters greeted us on our walk back to our hotel in Back Bay. 

Recession-shmesession. At least that’s the reaction the market has shown the past few days to the most alarming jobs data this economic cycle has seen. In the face of those dismal economic numbers that signal recession, the market has abandoned its violent volatile swings, giving way to milder reactions leading some to question whether the period of volatility is over.

The VIX, an index that gauges market volatility, has slid to a level of 23 from its peak year-to-date of 32.24 reached on March 17th — the day that Bear Stearns (NYSE:BSC) collapsed.

The technology sector, typically a sector that sees upside in boom times and harsher-than-deserved downside in recessionary times, is showing less volatility. As measured by the VXN, technology volatility was down approximately 8.5% last week, essentially keeping pace with the VIX, which saw a 10% decline over the same period, according to Market Intelligent analyst Chris Jacobson at Susquehanna Financial.

“I don’t think we’re going to see it as volatile as we have,” said Andy Busch, global ethics strategist at BMO Capital Markets. “It’s almost impossible. Basically the market has essentially starred into the abyss and they saw themselves and that was somewhat comforting.”

“I think we had so many down days and most of it has been priced in unless there are major shocks — another firm collapsing, more bad news in the housing and credit markets — I think the economy will start recovering,” said Cem Hocaoglu, head of Quantitative Derivative Strategy at Susquehanna Financial. “Most people already . . .

As the holiday season begins winding down in the last week before Christmas, investment bank Lazard Capital says sales aren’t all retailers hoped they’d be. In fact, sales hint that consumers are acting as if the economy is in recession.

According to a recent CNN poll, roughly half surveyed said they think the country is already in a recession.

“People who believe we are in a recession, probably spend like they are in a recession,” Lazard Capital analyst Todd Slater wrote in a research note. “That means reining in discretionary spending and making fewer trips to the stores. This environment favors defensive consumable and grocery-related discount names.”

Slater’s research comes as The University of Michigan today reported consumer sentiment slipped to 75.5 in December from 76.1 in November, still the lowest since Hurricane Katrina.

For the month-to-date December period, Slater says channel checks reveal “imploding traffic trends” and shortfalls to forecasted sales. The analyst says he is hearing that some large retailers in the department store space could be behind by 6% to 10%.

“While earnings are still at risk and weakness could bleed into the first half of 2008, we would buy the dips and remain constructive on a number of retail/apparel/footwear stocks that remain well positioned for 2008,” Slater wrote.