The March 26th Newsletter Briefing is posted to the newsletter portion of the website. To access the newsletter, simply click on the "Subscribe Now" tab, establish a username and password, and you'll have full access to the Dynamic Growth newsletter and portfolio. This free trial will end on June 1, 2007.
After being down as much as 112 points intraday, the mysterious forces once again showed that they are not ready for the market to go down.
If you have been following this blog for some time, you know that we have reported on the mysterious forces in the stock market on numerous occasions. In fact, you don't have to take our word for it, Jeff Saut at Raymond James has been all over these mysterious movements for quite some time.
In 2006, Saut said;
"As for the “here and now,” we have deemed the recent performance by the major market indices to be somewhat “unnatural.” Markets typically go up, correct by 25%, and then re-rally if they are going to trade higher. This, ladies and gentlemen, has not been the case recently as the averages have “unnaturally” vaulted higher without so much as ANY correction."
Other strange occurances Saut listed as "unnatural" were;
1) "The Department of Energy mysteriously said it would not add to the Strategic Petroleum Reserve (SPR) until after the winter months, even though the SPR was below prudent norms."
2) "When it looked like the equity markets were set-up to correct (read: decline) in mid-October, the NYSE petitioned the SEC, and was granted, a mysterious reduction in margin requirements for an already over-margined hedge fund community."
3) " Also mystical is why every time the equity markets look like they are set up for a downside correction, do “buyers from Mars” appear in the futures markets to prevent a decline? We have documented such occurrences in past missives where those “mysterious buyers” have shown up at 6:30 at night and “bid” the S&P 500 futures from 1375 to 1397 (or +22 points) in a mere two minutes, but that is a discussion for another time."
Like my property tax (you don't really own your property even if you paid cash for it) arguement from March 19th, don't ever buy the arguement that you are in control of your investments. Some mysterious movement can occur at anytime and prove you wrong.
Now don't get me wrong, a I do not believe in conspiracies. I believe in what is, is. I do believe that there are people out there that will take your money when you least expect it. I do believe that someone/something other than the lay investor has the power to rally or sell-off the markets anytime they see fit.
For now, these someone's or something's do not want the market to go down. Ok, fine, what is, is. Eventually, when "they" think they've got us where they want us (like the NASDAQ in 2000, and real estate in 2004), they will pull the plug.
If you have ever wondered why Warren Buffett seems to always hold a huge amount of cash, now you know. He knows that eventually, the time will come, when someone(thing) pulls the plug on the market. This is why he has used sayings like, "when the tide goes out, you'll know who has been swimming naked", and why he calls the market, "Mr. Market".
Today, stocks recovered most of their losses to close down 11 points. The worst selling of the day came in the first hour, after a report that new home sales in February dropped to a level not seen since June 2000.
Intraday, oil prices exceeded $63 per barrel as Iran continued holding fifteen British military personnel for questioning. Tensions in the Middle East should provide support for higher oil, and the consumer are getting pinched from tightening credit standards from the banks.
April will probably bring some bad news on the earnings front as technology and retail will begin to lower estimates for the upcoming quarters.
