MARKET COMMENT
May 24, 2007
Just when you thought Greenspan alone might send the markets
reeling, ideas that interest rates might be “increased” due to stronger than
expected economic data sent bulls to the exits.
No doubt they’re already on the road to the Hampton’s for the holiday weekend.
Higher interest rates would be a pretty wacky idea that if occurred would
trash most markets.
The only winner
might be the dollar.
But, as we’ve been suggesting with markets overbought it
wouldn’t take much to stampede investors.
This combined with the holiday weekend gives everyone pause.
And, no doubt the “sell in May and go away
crowd” will start crowing.
To the latter
I would suggest that over the past few years it’s only been an effective
strategy given “when” you sold in May given the wide performance disparities
from year to year.
Disappointing clearly was tech where news from NTAP and CA helped
to rout shares.
Overseas markets didn’t fair any better as most markets have
been highly correlated separated only by degree.
That’s enough for one day.
Tomorrow should offer light volume and markets could get easily pushed
around.
If we have another down day,
look for more follow-thru selling on Tuesday especially at the opening.
Of course, this market feels every bit like the end of
February when markets everywhere were overbought, China markets fell sharply,
Greenspan was yakking then about recession and a large correction ensued.
Is this a deja vous deal?
We’ll
know by Wednesday probably if not sooner.
Tomorrow we’ll be posting an outline of some new and old Emerging
Market issues combined with an interview with an important firm in that
sector.
Stay tuned for that.
Have as pleasant evening as possible.
Disclaimer:
Among
other issues the ETF Digest maintains long or short positions in:
QQQQ, IWM, SPY, GLD, DBC, RCD, KBE, EFA, EEM,
ILF, FXI, INP, EWA and EWC.