MARKET COMMENT
October 23, 2006
The Bond Police have been out in force the past two weeks
taking prices down and yields higher in the face of overbought markets, a Fed
policy meeting and a Treasury auction. Is
this a buying opportunity then? Sure, if
you’re interested in making a “little” money, maybe so.
Okay, enough about all things boring. You’re interested in sexier topics like the
rip-roaring stock market right? If you’re
bearish, it’s best to keep that to yourself and stay out of the way less you want to get trampled.
For bulls, enjoy the rally while it lasts since just about
everything is overbought.
So, what’s not to like?
That’s an easier writing task than everything else so let’s play the
spoiler briefly.
Just as there were plenty of scams from the stock market
bubble (Enron, Tyco, WorldCom, etc), there will be as many or more from the
real estate bubble’s aftermath particularly from the mortgage area. (Jeff Skilling got off lucky with a 24 year 4
month prison term versus 25 years! Whew!)
So, we must like something right? You betcha!
We can “pump and dump” with the best of them, but we’re just
doing the former today. More earnings will
be issued and digested and, naturally, the Fed decision is on tap. But the bond police seem wary about both the
Fed policy announcements and possible language changes to their current bias.
Despite any negative rambling; the bull’s still have the
ball until it’s taken away.
Disclaimer: The ETF
Digest maintains positions in: IEF, SPY, GLD, GDX, FDN, HHH, IFN, IBB, IYR and
XLU.