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 Was the Correction Just a Week Ago?

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Number of posts : 440
Registration date : 2007-07-01

PostSubject: Was the Correction Just a Week Ago?   Fri Aug 24, 2007 11:08 pm

Was the Correction Just a Week Ago?

Posted on Aug 23d,

Keith Lenger submits: Was there a correction coupled with pervasive fear in the market a week ago? You sure wouldn’t think so, if you look at the market moves over the last few days.

The intra day low on the S&P 500 was 1370.60 on 8/16 and yesterday
the intra day high was 1464.86. That is a 6.87% move in 5 days!
However, from close 8/16 of 1411.20 to close yesterday of 1464.06 we
have moved 3.75%.
This, coupled with E-Trade (ETFC) and Ameritrade (AMTD) merger news followed by the BofA (BAC) investment into Countrywide (CFC),
has really excited the market. You’d better grab your saddle or you’ll
be left behind. Left behind to watch the stamped run over the cliff.

We would have liked to have seen a better consolidation period in the
market with a less aggressive run up. 3.75% is not bad, but its the
intra day 6.87% return bothers us a bit. There is no doubt that this is
a traders market.
We continue to hold out that the US
economic bedrock is still very firm. If the market continues to run
hard to the upside by another 3%, we will place the (SH)
short S&P 500 proshares allocation in play. We speculate that the
FED will not cut the Fed Funds rate and that this could be another
potential pull back in the range of 3%-5%. Currently, we have 13% in
cash and are not to satisfied with the amount of cash on hand.
From intra day peak to yesterday's close (DBV)
Powershares DB G10 Currency Fd is down 9%. We are going to take the
bold move or raising our weight from 1% to 2% in Max Growth Portfolios.
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