Friday June 8 Daily Market Assessment

Boy, When I'm Wrong, I'm Really Wrong!

Early this week, I was confident that the market rally would continue. Yes, I saw some sideways action in front of us, but I did not imagine that the market would react so negatively to Ben Bernanke's relative optimism. In fact, what the traders saw in his remarks was the end to any possibility of a rate cut this year. That insight put the market into a tailspin from which it has not recovered as of Thursday's close. We've watched more than 3% get wiped off the S&P 500 in three days, and my accounts are damn close to zero YTD! And I'm not sure it's over yet. Friday will be a critical day to watch the market. If it rolls over and plunges south another 100 points or so, I think it's safe to say the bull market is over for awhile.

On the other hand, if the traders see this as a buying opportunity, and jump back in, then we'll be back on top in just a week or so. That's what I'm predicting!

The market's fundamentals have not changed; business is still very good, especially for the big, blue chip guys who are making money hand over fist all over the world. Yes, it's true that interest rates are going to remain high, but so are profits, apart from retail. Inflation does not appear to be a serious threat, in spite of Bernanke's cautions, and all the other metrics suggest that we are accelerating out of an economic dip. I say, "All Aboard!"

But I could be wrong; I was wrong this past week, remember.

Summary: Long term bullish, Short term nervous!