Follow the Bouncing Ball

Were over sold, the market will attempt a rotation into financials (as forecast) and try to call a top in all things related to commodities. I.E. Nothing has changed. Only Derivatives and their creation continues to grow, ten to twenty times faster than the economy is growing. The news announcement today by Chairman Bernanke, that the FED Window will remain open through 2009 suggests that no more bankruptcies will be allowed this year under Paulson's watch....period. That is the good news...the bad news is that the leverage in the system continues to grow and is arguably out of control.

"With lenders becoming evermore tightfisted and hedge funds looking for low-cost ways to make big bets, more funds are buying up so-called leveraged ETF's, investments that promise two times the rise or fall of an index. Although ETFs generally are viewed as conservative vehicles, these ETFs can result in big gains or losses. Hedge funds are embracing these new vehicles and makes them now even more riskier than they may appear." WSJ

"In the past 104 years annualized returns during Presidential Terms January- December CAGR (subsequent four years): Republican average +4.7% Democratic average 6.8%. Thus, we often think that investors probably get more worked up around the elections every four years than they need to." Citi Research

2008 change in inventory of homes for sale dropped -2.9% in May in Minnesota. The housing correction, remember, began in 2005. So, three years into this we are probably now at or near a bottom here in the the Midwest.

GARP. Growth at a reasonable price, not bottom fishing is the best way to make money. Save your powder, this market rally is a dead cat bounce. You will get another chance at your favorite GARP's in a few months.

Danny Boy seen here catching the ball, his favorite past-time.