We made our short trip to Atlanta, and I can tell you, the consumer is very angry. On our team alone, everybody was complaining about the high cost of fuel.
We live in a conservative part of the south, and I heard several comments that were not very kind toward the current administration. Mind you, these are people who are conservative Republican's. In fact, one person likened the Republican's to a bunch of "country club elitists" who are sitting back laughing while the little guy suffers.
Unfortunately for the American public, the Democrats are so far to the left, and so crazed in their thinking that the mainstream public cannot relate to them either.
It will be interesting to watch how high the consumers "pain threshold" is. My guess is it is at a tipping point now, and when the November elections roll around, you will see enough protest votes to shift the power in congress.
There is a wildcard to keep in mind however. Just prior to the 2004 Presidential Election, oil prices "magically" dropped, and then climbed higher when President Bush was re-elected. Coincidence, or was this by design?
OIL ETF NOW TRADING
The much talked about US Oil ETF (USO) began trading today. With all of the hype I expect investors to jump in and buy at what could be a short term top. It never fails, and I love to watch the timing of Wall Street as they make there moves when a product is red hot, or temporarily out of favor.
Since oil is "red hot", they come out with a product they know investors are itching to buy. In the case with Google, investors were bailing out, and after a 140 point drop, the stock is added to the S&P 500. It must be nice to be on the inside.
So, this being said, would I buy the Oil ETF (USO) now? No, and I may be wrong, but I am inclided to wait for a $5-10 pullback before I get interested in USO.
MEDIA SCREAMING "BULL MARKET"
Let them scream. If I am even close to being right, higher energy prices, commodity inflation, and a slowing real estate market will lead to an end of the cyclical bull market. Of course nothing ends until those pushing the buttons decide its going to end.
In April 2000, the NASDAQ was beginning its sell-off and was around 4200 after hitting 5132 in March of the same year. By May 2000, the index was a hair above 3000. The S&P 500 was at 1553 in March of 2000, and the only index coming close to new highs is the Dow. On January 10, 2000, the Dow topped out at 11,750.
The definition of a new bull market is when prices reach their previous highs, then continue to go higher. We will probably see new high's on the Dow (for a short time), but I think the S&P and NASDAQ will be turned away after a gallant effort.
One more tid-bit of information. In 2000, Crude Oil was trading at $25/bbl, and Gold was around $280. Now that is a low inflationary environment
