John Mugarian's Dynamic Growth

Happy New Year to all! Before I get started, I would like to thank everyone for the kind words, and appreciation for what I do. Unfortunately when you have a "free" blog, or website, it is open to everyone and anyone. This potentially can create an opportunity for someone to express themselves in an inappropriate and disrespectful manner.

Sometime this year, I hope to have our Sector Rotation Newsletter available for subscribers. This will be a "paid" service, and I can give more detailed and actionable investment advice.

For the past three weeks, I have been working on the Sector Rotation Model to identify the best sectors for January 2006. In the Sector Rotation newsletter, I will make changes to the model to make sure that our investors are always in the best performing sectors.

2006 STOCK MARKET

For trend followers, 2005 was a very disappointing year. In the Stock Traders Almanac, they built a case for why years ending in "5" are normally positive. Of course, 2005 was historically very disappointing.

As 2005 came to a close, the indexes essentially went nowhere:

DJIA -.61%
S&P +3.00%
NASDAQ +1.37%

Since bouncing off the bear market markets lows from 2001-2002, the markets performance in 2004 and 2005 were essentially flat. 2006 looks to be the set up year for a new bull market.

The best scenario is a steep decline in the first 6-9 months of 2006, followed by a combination of events that could trigger a powerful rally into year-end. What could the catalyst for the new bull:

Energy Prices Decline- As the economy slows, demand for energy will soften, and so will the demand for raw materials.

Fed Reverse Course- the Federal Reserve not only stops raising rates, but reverse course, and begins lowering rates.

This is very unfortunate. I have known Jim Rogers for about 10 years. Jim started the Quantum Fund with George Soros.

Jim is the author of the book "Hot Commodities", and his calls on commodities and energy have been right on the mark.

The unfortunate part of this story is Jim runs a couple of commodities funds, the Rogers Raw Materials Fund and the Rogers International Raw Materials Fund. The management company for Rogers' commodity-tracking index fund had $362 million or over 60% of their assets with Refco.

Don't you love it! Well, the "2 Minute Drill" has begun (see December 29th post). The Dow, S&P, and the Nasdaq kicked off the New Year with a bang after the Federal Reserve signaled that they may be close to the end its of rate hikes. In the minutes of the Fed's December meeting they said the number of rate increases left is "probably not large".

Oddly, among the best performers for the day were Energy stocks as oil jumped more than $2 per barrel to a two-month high of $63.14. Gold stocks also leaped higher as investors felt that the Fed was not serious about tackling the underlying inflation problem. At the close, the price of gold rose 2.6%, its biggest gain since May of 2003.

Shares of Wal-Mart (WMT) continued to decline after the company said that its December sales came in at the low end of estimates. Needless to say, we are happy that we unloaded WMT on December 15th above $49, and Best Buy (BBY), above $50.

I wanted to give you some opinions from some investment advisors I really respect. This is not to say that I always agree with them, but it is a good idea to get your ideas from several sources. By doing this, you can comfortably arrive on an intelligent investment strategy for your accounts. Here are some of those opinions:

LOUIS NAVELLIER:(www.bluechipgrowth.com, www.navellieremerging.com, www.navellierglobal.com, www.navellierquantum.com)

The stock market is essentially on hold until we hear more from the Fed. More specifically, the market wants to know when the Fed will stop raising rates. In a typical environment, the Fed would never want to invert the yield curve, but I think we can all agree that today's economy is far from typical. Furthermore, Greenspan said at the Joint Economic Committee meeting in early December that he doesn't think the yield curve is a "foolproof indicator of economic weakness". In fact, he said it can be "quite misleading".

On January 3, the Fed will release its minutes from the December FOMC meeting. The market will be looking for any clues that indicate the Fed is almost done raising rates. If the clues are there, the market could rally a bit before the employment report.

Here's where it get tough. We are basically stuck with making up our minds about which half of the year will bring cyclical market highs, and which half of the year will bring the cyclical market lows.

Of course, everyone has an opinion, but when you begin to gather all of the data, picking which half will do what results in a coin flip.

For example, Peter Lee, the wonderful (and pretty accurate) technical market strategists at UBS, believes the first 6 months of 2006 will see new cyclical market highs. After that, it will be bombs away, and new cyclical market lows.

Here are a few predictions from Peter for the first half of 2006:

DOW 12,000
S&P 1350
Nasdaq 2500-2600

a) Mid-Cap growth will have the greatest return.
b) Selective Basic Materials, Industrials, and Financials will lead the way.
c) Stay away from Regional Banks
d) Oil will trade to $70-71/ bbl before the stock market runs into trouble, then $80 by year-end.
e) Energy's strength is in the Oil Service sector.
f) Bullish on Gold; pullback to just above $500, then rallies to $563-600.

Have you ever noticed that brokerage analysts upgrade or downgrade a stock right after a company makes projections for the quarter or prospects for the year? Well heck, we could do that. You may think I am kidding, but brokers today have little or no choice but to use their firm痴 research. If the broker has to use the research, guess what information the broker is passing on to you?

Believe it or not, many brokerage firms have in- house mutual fund managers that do not have to listen to the advice of their own analysts. On the other hand, brokers do not have a choice. Since you usually take your brokers advice, he is just mimicking what the firm痴 analysts have to say. The firm痴 mutual fund managers can choose to take the advice of whomever they wish (other firms, S&P, Value line, etc).

Here are a few examples of how brokerage firms pressure their brokers to follow the firm痴 advice.

On December 22nd, I posted a journal piece titled, "Time to be a Contrarian". I said:

"Since GM has been one of the worst performers for the year, I have got to believe that 2006-2007 will bring a turnaround for the company. I am not placing the stock in the IA portfolio, but for speculators/contrarians, this is an interesting bet".

If you happened to buy the stock in December, you probably picked it up around $18.40. With the stock now trading above $20, the gain is a little over 10%.

GM will be rolling out an important line of hybrids this year, which includes Tahoe's and Yukon's.

With the news being so negative, I couldn't resist buying the stock as a speculation.

This morning, IBM announced that they are shelfing their pension plan and incorporating a ramped up 401k. This is what GM and Ford are trying to do, but it is a little more complicated.

Eventually, I think you'll see all corporate pension plans be replaced by 401k's.

The market has begun its euphoric phase as stocks marched higher despite the rise in energy prices. As we had stated a few weeks ago, many investors are betting the winners of 2005 will continue to be the winners in 2006. All we have to say about that is "not so fast".

The psychology today is the Fed will stop raising rates and everything will be fine. This assumption of course is way too elementary. To think the Fed will stop raising rates, then immediately reverse course and begin lowering rates, is only wishful thinking.

Veteran market watchers know that it takes about 3-6 months for a rate hike to begin affecting the economy. This being said, the medicine from the December rate hikes will not begin to take hold until the March-June timeframe.

For those of you who have lines of credit at a bank know that your interest rates have jumped dramatically. Depending on your FICO score, the interest rate on your credit-line can vary from 6.75%-8.25%. Chances are, the more you have borrowed, the higher the rate.

Many consumers have bet the farm (no pun intended) by pulling out equity in their appreciated home values to fund their overzealous spending habits. Another rate hike or two (3, 4?) will drive rates on credit lines even higher.

Overly aggressive mortgage lenders have sold consumers a bag of goods. When you take into account that approximately 25% of all real estate sold in the U.S. was purchased by speculators looking to make a fast buck, the closing dates on these purchases are fast approaching.

Real Estate (Condos,etc..) purchases made at pre-construction prices 2 years ago will begin to go to closing as early as this March. I know many speculators, and despite their high incomes, some cannot afford to close on the properties that they have speculated on. So, in the next year or so, things could get very interesting.

In addition, it痴 become real clear that there is more supply than demand. Along the Gulf Coast, there is not much demand for $800,000, 1100 square foot condos in hurricane alley.

The Dow Jones Industrials past the 11,000 mark for the first time since May 2001. Watch for the media types to begin howling about investors who missed the boat, and undoubtedly this will cause many to jump into the market at just the wrong time.

Could the hype and euphoria carry the markets for a few more rounds before it drops? Of course! In fact, market strategists like Peter Lee feel the markets could continue to new highs before reverting back to the next leg of the bear market phase.

The ideal scenario for the grand finale is a market that sells off and consolidates in the coming weeks, followed by one more euphoric attempt to the upside. Who knows if that will actually happen, we may be witnessing the top now, or over the next week or two.

According to insiderscoop.com, Google insiders sold a whooping $305,757,056 in stock from January 4-9. With its market cap well over $130 billion, the Wall Street Gang continues to pump the stock.

Also high on the insider selling list is ipod champion, Apple Computer. Apple insiders have been large and steady sellers by raking in $51,745,460, at prices ranging from $72-75 during the same time frame.

Insiders in general are still heavily tilted toward the sell side which indicates that bargains in this market are scarious.

The top oil analyst on the street is Doug Terreson from Morgan Stanley. Doug has an excellent track record and is a great guy. Here are some of his latest comments:

THE GOLDEN AGE OF REFINING:

Maintain Overweight On Integrated Oils, R&M: Integrated Oils appear 15% undervalued on normalized returns on capital. Independent R&M represents the best value per unit of return in Energy, and remains the largest sector bet in the Global Model Energy Portfolio.

It eventually hits all high flyers; p/e compressions that is. Today, we began to get some signs that the tide does eventually turn for high flyers with high p/e's.

Today's example is Wall Street darling, Genetech (DNA, $89.22-$4.12). While today's mild sell-off was not much of a decline,a bigger decline could be in the works. It usually is with most mo-mo stocks. When analysts begin to jump on the overvaluation bandwagon, it will be bombs away on the stock.

Here's an example:

Today, Eric Ende, an analyst at Merrill Lynch cut his rating to neutral on DNA saying " Genentech's stock is trading at a multiple of 52 times expected 2006 earnings. That compares to a multiple of 21 for rival Amgen Inc. (AMGN) and 24 for Biogen Inc. (BIIB)".

Since DNA is trading at a p/e of 75, in order for the stocks p/e to get in line with its rivals, the stock would need to be cut in half (actually more than half).

If anaylsts are going to all of a sudden get concerned about the p/e ratios of the mo-mo stocks, what are they going to do to Google (GOOG)? Even at a forward looking p/e of 50 on Google, the stock is still way more expensive than its peers.

I grew up in Detroit, and I remember the bad times in the auto industry. The Wall Street Journal reported yesterday, that investors will probably sell the stock if GM reduced their dividend. Why would this information be considered negative, and what is is the Wall Street Journal痴 reason for making this assumption?

In the past, when GM and Ford reduced their dividends, investors looked at this as being a positive, and the stocks went up. I don稚 think that current GM shareholders own the stock because of the dividend. Given the current market environment, owning the stock as an income source would not be very wise.

On the other hand, owning GM shares in anticipation of a dividend reduction would make sense, since the financial hardship that GM is currently experience is the burning of cash.

If GM cuts its dividend in half, the stock would still yield 4.7%, and save the company $550 million a year. When you get a company to stop bleeding cash, this has got to be viewed as a positive, not a negative like the Wall Street Journal would like you to believe.

Peter Lee, Chief Technical Strategist at UBS believe's the S&P broke out of its trading range in December, but was in overbought territory and due for a pullback.

Here are the near term technical levels:

SPX Support 1240-1250 Resistance 1320-1350
DJIA 10700-10750 11000
NASDAQ 2200 2500-2700
Dollar 86-87 95-97
10 Yr Note 4.2% 4.7%
CRB Index 300 area 340 area

Boring just about sums up today's trading activity. After trading flat to down all day, the Dow and Nasdaq bounced back to close basically unchanged.

DJIA: 10959.87, down 2.49
S&P 500: 1287.61, up 1.55
Nasdaq Composite: 2317.00, up 0.40

The most interesting news of the day did not receive much attention, and this is the news of credit card giant Mastercard going public sometime in 2006. I will be keeping an eye on this one because I think the long profit potential from this IPO could be substantial. If you happen to hear when Mastercard is going public, please post a comment on the website.

In other news today, Tyco International announced they were splitting into 3 companies, and the stock dropped 3 dollars after warning that results will miss analysts forecasts.

Tyco (TYC) could be another profitable play since spinoffs have had outstanding track records (IE- Zimmer (from BMY), Medco (from MRK), Genworth (from GE)).

Here is an article written by Henry Blodget posted today at www.internetoutsider.com on Google's upcoming accounting changes.

Google: Accounting Changes to Whack Cash Flow

Two accounting changes will significantly affect the optics of Google's operating cash flow and earnings beginning in Q1 2006. Neither will change the actual cash generated by the company. As Microsoft's recent implementation of a similar accounting change demonstrated, however, sometimes optics matter.

Posted by Henry Blodget on January 17, 2006 at 08:41 AM

So that's why the Yahoo (YHOO) insiders have been selling. After the bell internet giant Yahoo said fourth-quarter profits doubled, but missed analyst痴 forecasts by a penny.

In after market trading, Yahoo is trading down $5.36 or 13%. Whenever a stock is priced for perfection, this is what usually happens.

Amazingly, shares of Google (GOOG) are also trading down $16.61 in sympathy with Yahoos miss. Google is currently priced at $450.50 in the after market.

I told you a few months ago that Wall Street would probably start hyping up the market once we got a year-end rally. The "year-end" rally was delayed in December, and was reserved instead for the opening weeks of the New Year.

The Spin Begins
November 28, 2005

We began getting severe cross currents as to whether the market would decline in the first half of 2006, followed by a new bull in 2007, or vise versa. The jury is still out on which one will occur.

Something that is clear is the market is overbought, and was due for a pullback anyway.

This morning we woke up to news that the Asia Pacific markets were taking it on the chin. The Japanese Nikkei was up 40% last year, and their market has fell 6% in the past two trading sessions. It is still unclear as to how and why the sell-off was so severe. I guess the "big boys" who have access to the button that can sell a billion dollars worth of stock in a matter of minutes were getting an itchy finger.

It amazes me how news of a regulators investigation of a Japanese internet company can trigger such a dramatic turn of events. We hear news of financial probes almost weekly, and we don't see that kind of reaction in our markets.

With the DJIA closing down 41, and the NASDAQ down 23, the big question remaining is this the beginning of a big correction. The answer comes in the technical readings of the market.

For now, we will assume the market is going through an overbought corrective phase if the major market indexes can hold above these levels:

S&P 1240-1250
DJIA 10,700-10,750
NASDAQ 2200

A significant break below these levels will signal a more severe break to the downside.

Over the past few months, I wrote that I would be holding a large cash position above 1250 on the S&P, and 10,800 on the DJIA. If the markets happen to rally to the top end of our projections, we would simply dollar cost average into our hedge positions (Rydex Tempest 500- RYTPX).

Here is the upside target:

S&P 1300-1350
DJIA 11,000
NASDAQ 2500-2600

I don't know how many of you read Barron's, but there were some very important issues raised in the roundtable discussion, most notably, oil.

Marc Faber brought to light the geopolitical risks facing our nation, as China and Russian have formed alliances to gain access to more Middle East oil. In the process, this alliance has asked the U.S. to begin setting a timetable to close its military bases in Asia. They are basically telling our political and corporate leaders, to stop trying to gain control of middle east oil.

So, if you are wondering why the price of oil, and oil related companies have been steadily rising, look no further than the geopolitical firestorm that is brewing between the two biggest bullies on the block.

The big U.S. oil barons, who have controlled the world痴 oil and profits, are now running into major resistance from some very powerful foes.

As an example, the members of the Shanghai Cooperation Organization (consisting of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan) held a joint eight-day military exercise involving 10,000 Russian and Chinese troops. U.S. political leaders asked the SCO to reduce the magnitude of the exercise, and both Russia and China said "no".

The leaders of the Shanghai Cooperation Organization (SCO) include notable names like Russia痴 Vladimir Putin, China痴 Hu Jintao and Iran痴 Mahmoud Ahmadinejad.

To counteract the SCO's show of muscle, the U.S. held a week long 笛oint Air Sea Exercise 2005� in Okinawa and Guam which included 10,000 troops and 100 warplanes from the USS Kitty Hawk strike group. Included in the exercise were troops from South Korea.

The markets are fast approaching the critical support levels I mentioned on Wednesday. Let痴 see if the major indexes can hold at these levels.

S&P 1240-1250 (Currently @ 1270 down 14 points)
DJIA 10,700-10,750 (Currently @ 10,754 down 126 points)
NASDAQ 2200 (Currently @ 2267 down 24 points)

One event that could trigger a reversal is energy prices. The March 06 contract for crude is trading at $68.20 +$1.01.

Its amazing that events in Iran could trigger such a dramatic rise in the price of crude. The U.S. "big boys" can jabber and moan all they want, but I don't think they want to go up against the SCO (read January 19th post "Barking up the Wrong Tree") when its comes to Iran.

Earnings warnings, rising energy costs, and cautious guidance going forward all weighed on the markets Friday. Today's across the board whipping just goes to show what happens when a market is priced for perfection.

Coming off the heels of Yahoo's disappointing results, Dow giants General Electric and Citigroup failed to live up to analyst expectations. In addition, Motorola also did not meet consensus estimates.

One of the biggest news items of the day was the sell-off in Google (GOOG). The stock plunged 36.96 to 399.46 after the Justice Department took action to get the company to turn over information about people searching for porn on their website.

I do not believe that the recent sell-ff in Google shares was entirely attributed to the actions of the Justice Department. That was just an excuse. The real nervousness is the company's upcoming earnings report.

The jitters began on Wednesday after Yahoo announced its earnings shortfall. Google's earnings are due out Jan. 31.

Do I think this is the demise of Google's meteoric rise? Probably not, that would be too easy. After Friday's plunge, every arm chair market expert has more than likely rushed in to short the stock. I would not be surprised to see the shares rise to the $450 level before the January 31st earnings are released.

Bank of America (BAC), the second-largest bank in the U.S., announced earnings that fell short of analyst痴 expectations due to higher loan losses, as well as lower earnings from trading.

Analysts from Thomson First Call expected earnings of a $1.02, and the company earned 93 cents. What was the real culprit? Consumers scurried to file for bankruptcy before the laws changed last October.

I am not concerned at all with BAC announcement. Bank of America is one of those stocks that I have on auto pilot, and I reinvest the 5% dividend every quarter. Long term investors should do the same.

I couldn't resist. Earlier this afternoon I was flipping through the channels, and happened to see the President of Ford Motor giving a speech on C-Span. Boy, what a "Dog and Pony" show!

Here's the scene. The President of Ford was dressed like a U.S. President (You know, dark suit, bright red tie), reading from a teleprompter, in front of an audience that was obviously handpicked.

Am I wrong, or has corporate America adopted the philosophy, "if you can't compete, dazzle them with B.S." After the speech, the audience gave the Ford executive a raving round of applause. I don't think the audience included any of the 30,000 people who are about to lose their jobs, or included any members of the AFL-CIO.

A month or so ago, the Chairman of General Motors did the same thing. After seeing the act twice, I couldn't help but comment.

Granted, Ford and GM do not have a choice. They are in trouble, and need to cut their workforce in order to reorganize and compete.

According to the National Association of Home Builders, the real estate market is starting to rollover.

Here are some commentsfrom BCA Research (www.bcsreaseach.com):

U.S. Housing Is Slowing, Consumption Is Next
10:32:00, January 20, 2006

Recent data confirm that the U.S. economy is slowing. The January U.S. home builders’ survey was unchanged from the previous month, failing to rebound after steep losses in late 2005. Meanwhile, both housing starts and new permits were down sharply in December, underscoring the comments in yesterday’s Fed Beige Book that housing activity is cooling in most districts. Housing affordability has eroded significantly due to sky-high house prices and, to a lesser extent, higher mortgage rates. Real consumption growth tends to weaken after affordability has significantly declined. Bottom line: with housing cooling, a replay of the 1995 mid-expansion economic slowdown looms.

In an attempt to respond to a couple of viewer comments and a question, I wanted to post some comments from Paul Craig Roberts, a former editor and columnist for The Wall Street Journal and columnist for Business Week and the Scripps Howard News Service.

Roberts was Assistant Secretary of the Treasury for Economic Policy under the Reagan administration, and was awarded the Treasury Department痴 Meritorious Service Award for "his outstanding contributions to the formulation of United States economic policy".

We would all like to believe that our economic policies are being implemented for the public good, but at times we need to understand that sometimes there not.

I have followed the psychology of the market "big boys" for quite sometime. One thing they are very good at is sucking investors in before they pull the rug out from under you.

This being said, investors are a little skittish after last weeks 200 point one day drop. Apparently the institutions were not the ones selling, it was the hedge funds. Hedge Funds take profits on a quarterly basis so they can justify their ridicules fees.

So, going forward, I would expect a rally into months end, followed by a market that trades sideways for a few months (S&P 1250-1290).

Then, just when you least expect it (Early Spring), the "giant sucking sound" will begin. This sucking sound will be investors being sucked into the market as the popular averages break above the 1290 mark and make new cyclical highs for the year.

I love it when everyone jumps on the "doom and gloom" bandwagon. It seems nowadays that companies like GM and Ford do not have a friend in the world.

While the media types continue to warn of the dire consequences surrounding both companies, the smart money is buying.

A few days ago I told you that some very savvy mutual fund managers were buying, and yesterday we found that billionaire investor Kirk Kerkorian had bought back his shares after taking a tax loss in December.

Almost on cue, the popular averages are approaching their early January high's. The market is running on fumes, but may have enough left in the tank to come close to the 11,000 mark one more time.

All of a sudden, the big market players are concerned with revenues. Given the number of earnings and revenue disappointments (IE- Alcoa
Dupont, eBay, Apple, Yahoo, Intel, IBM, CitiCorp, GE, and JNJ), the market is poised for a correction, or time out, for the next two months.

Today, was a sign of things to come when flash memory darling SanDisk (SNDK) said things are great, and Wall Street rewarded the company with a 12% haircut in its share price ( down $8.63, to $62.05 in the after-hours).

The IA portfolio is currently 50% in cash. We have been increasing our position in the Rydex Tempest 500 (RYTPX) to 10% of the portfolio

I saw two very good interviews this morning, one with George Soros on CNBC, and the other with Marc Faber on Bloomberg.

Soros of course has a keen sense of the world and world economies. As he commented on impending bubbles, he said “that markets do not react to bubbles right away; instead they are very complacent, kind of like people on the Titanic. People aboard the Titanic were on deck having a good time just before disaster struck”.

Faber was interviewed in Barron’s a few weeks ago as a roundtable expert. He is a tried and true contrarian, and believes in the philosophy that "many shall be restored that are now fallen and many shall fall that are now in honor."

This brings us to the Real Estate bubble that so many are complacent about. Sticking with Soros and Faber’s view of bubbles and manias, I will once again try and pinpoint some events taking place before our very eyes.

Many believe that weakness in real estate markets and the economy will be rescued by Fed Chairman Bernake. This would be a huge mistake. Sometimes you just need to let recessions take their course, or risk hyper inflating the economy.

Gold and Commodity prices have been the only honest indicators of what’s really going on in the world economies.

Here are the new price targets for the large integrated oils, as well as select refining companies. This information is fron Doug Terreson at Morgan Stanley.

MARATHON OIL CORPORATION (MRO.N):

What's Changed
Price Target: $75.00 to $85.00
Normalized EPS: From $5.20 To $5.75
2006E EPS: From $8.45 To $9.00
2007E EPS: From $7.75 To $8.50

CONOCOPHILLIPS (COP.N):

What's Changed
Mid-Cycle: From $5.65 To $5.75
2006E EPS: From $8.75 To $8.90
2007E EPS: From $8.55 To $8.60

AMERADA HESS CORP. (AHC.N):

What's Changed
Normalized EPS: From $15.50 To $15.75
2006E EPS: From $16.50 To $16.60

Oil prices are once again near $70, the housing market is beginning to struggle, and short term interest rates will probably rise two more times. Given all of this news, you are probably saying how can the stock market possibily rally?

March 2006, should bring the pause in interest rates that many investors had been anticipating. This pause should give way to a celebration in the market in early spring. This spring rally could be very powerful, and may actually be the last for quite some time.

In the intermediate term, I am anticipating a trading range market on the S&P with the risk to the downside being 1200, and the reward on the upside of 1300.

On December 22nd, I said:

Since GM has been one of the worst performers for the year, I have got to believe that 2006-2007 will bring a turnaround for the company. I am not placing the stock in the IA portfolio, but for speculators/contrarians, this is an interesting bet.

GM was trading below $19 at the time. I am curious if anyone bought the stock. If you did, please post a comment, or a yes on the website.

With the stock trading around $24 (31% gain), I want to know if you want me to continue keeping you updated.

The inflation data being released by the government is not worth the paper its written own. All one needs to do is look at how gold and the dollar are reacting to rumors that the fed may halt its rate hikes. These two indicators are telling us that real inflation is alive and well.

If you don't believe gold and the dollar, take a look at the stock of the Chicago Mercantile Exchange Holdings Inc.,(CME). Today, the CME reported a 24% increase in Q4 revenues. The stock is up +$15.35 or +3.8% at $419.35 per share. So, tell me, whose lying, commodity prices or the inflation numbers?