The month of August began with a bang, and is going out with a whimper. Rising energy prices are slowly increasing investors bearish sentiment. As bearish builds we need to keep in mind that the markets weekly and monthly technicals look fairly strong.
Also keep in mind that crude oil seems overbought and very extended at these levels. This overbought condition is usually a precursor to a stiff correction. In addition, the dollar has firmed up and the interest rate environment is still very favorable.
Sure, we may have a couple of scares as we get into September, but I am sticking with my call for a rally that will carry us into yearend. We will continue adding to the IA portfolio on further weakness.
