MARKET COMMENT
March 28, 2007
Bee-Gee Days
Were More Fun
I just can’t help it--I love this image.
I had more fun back then too, didn’t
you?
Anyway grown-up and serious Ben had
another moment to spin his yarn about what’s good and not so good about the
economy.
Investors wanted to hear something more understanding regarding
the weakening economy and less about inflation being still uncomfortably
high.
At the end of the testimony, there
wasn’t anything new for bulls.
For Ben, it’s back to message testing with Fed focus groups.
Over the weekend we pointed out that markets appeared to
forming a “W” formation which is often regarded as bullish.
Further, there are plenty of analysts noting
the 9-1 ratio of positive volume and advancing issues during the previous week’s
big move higher.
This too is
historically bullish.
But, Mr. Market
appears to have other things on his mind since the patterns we’re seeing are
anything but typical.
If you’re old enough you might remember the comedy classic [MMMMW]
featured above you might appreciate the “Big W” reference.
Over half the cast pictured, not to mention
others not featured, are now deceased.
But,
it has nothing to do with much of anything other than the “Big W” and that I
watch the movie once a year, so…
Elsewhere around the planet everything is moving along in
the pretty much the same manner.
I thought today would be significant and it was as Bernanke didn’t throw a bone to the bulls.
I think he may be more concerned with the
weakening dollar and wanted to show his inflation fighting resolve.
However, to ignore the evidence of
deteriorating economic conditions is hard to understand.
Declining home prices exacerbated by mortgage
market difficulties will negatively affect consumer spending.
And, consumer spending represents two-thirds
of the economy currently.
So I find his
comments rather mystifying.
The stand-off with Iran continues to heighten
anxieties.
Do the Iranian’s really want
to risk it all over this incident?
If
they find a face-saving way out of the situation, oil prices and perhaps gold
will fall sharply.
Ben was having more fun as a Bee-Gee don’t you think?
I was too.
Have a pleasant evening.
Disclaimer: Among other issues, the ETF Digest maintains
positions in:
IEF, GLD, DBP, DBE, DBC,
UDN, EFA, EWW, IEV, EWA, EWO and EWJ.