As I watched the closing ceremonies of the 2008 Olympic games in Beijing, I came away from the entire event with a sense of awe. The Chinese did a wonderful job, and their attention to detail was beyond impressive.

My takeaway from this massive show of detail and perfection quickly turned to the build out of China as a nation. Unless one has their heads in the sand, no one can deny that China will be one of the best, if not the best, economic superpower of the 21st century.

While the U.S. standard of living continues to decline, China's continues to grow. U.S. companies have fallen over one another to close up shop here in the U.S., and have moved production and manufacturing facilities to the Golden Dragon.

Investing is more about the sixth sense, gut feel, and growth, than it is a patriotic belief that U.S. companies and politicians will do the right thing. The "right thing" among these two begins and ends with how much money they can make. As it currently stands, the biggest untaped consumer in the world is not in the U.S, but in China.

Last week, oil rallied +$5.62/bbl on Thursday, and then sold off -$6.59/bbl on Friday. If you were watching closely, energy stocks rallied sharply on Thursday, but did not give back all of the gains despite a massive sell-off the next day.

Now that the Olympics are over, it will be interesting to see if the interventionists have enough muscle to drive oil prices below the 200-day Moving Average at 110/bbl before the November elections. I will also be watching the weekly oil inventory reports to see if China resumes their purchases of crude. If the inventory numbers magically show increased demand, then we'll know China is back in the game.

Speaking of oil, VP Dick Cheney will make a trip to Georgia and Azerbaijan in early September. Cheney is the point man for the major oil barons here in the U.S.. As I have said before, the U.S. administrations interests in Georgia are about oil, and not human life. Russia strongly opposes the plans of U.S. oil companies routing oil and gas through Georgia and Turkey instead of Russian pipelines.

The situation is much more complicated than the spin coming out of Washington. Just remember, it's all about oil. Higher oil prices are killing the U.S. economy, and is adding to the pain in the housing and credit crisis. Lower oil prices would put more cash in consumers pockets which would allow them to payoff debt, and create surplus cash for discretionary purchases. Unless prices decline ($75-$85/bbl), the economy will have a tough time recovering.

Here are our Top 10 ETF's for the week of August 25th:

1) DBA: Powershares DB Agriculture Fund- .332
2) EWZ: Brazil Index- .304
3) SLX: Market Vectors Steel Index Fund- .279
4) FXF: Currency Shares Swiss Franc Trust- .207
5) EEB: Claymore ETF BNY BRIC- .212
6) DDM: Ultra Dow 30 Proshares ETF- Not Rated
7) DUG: Ultrashort Oil & Gas Proshares- Not Rated
8) PGJ: PS Golden Dragon China Fund- .112
9) KBE: KBW Bank ETF- Not Rated
10) IYF: iShares Dow Jones US Financial Sector- Not Rated

The highest ranked ETF's in our universe remains T-Bills, short term bonds, crude oil (which may or may not decline further), and commodities.

At this juncture, I prefer holding cash instead of a bond ETF, and I am not comfortable with owning oil just yet.

Here are our Top 10 Fidelity Sector Funds for August 2008

1) FSCHX: Chemicals
2) FSMEX: Medical Equipment
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSPTX: Technology Portfolio
6) FSCSX: Computers & Software
7) FSCPX: Consumer Discretionary
8) FWRLX- Wireless
9) FSRBX: Banking
10) FSVLX: Home Finance

NEW BUYS:

None

NEW SELLS:

None

Honorable Mention (Holds):

None

The Week in Review:

Last week the stock market remained little changed on low volume. As I stated on Friday, most of the senior traders and "Ivy League Frat Boys" are on vacation. The Wall Street gang will be on vacation until after Labor Day.

The positive news, if the trend continues, is the dollar is rebounding, and commodity prices and oil are dropping. This is welcomed news, and is helping to reduce inflationary pressures.

Economic Reports This Week

-Monday, Jul Existing Home Sales (previous -2.6%).
-Tuesday, Jul New Home Sales (previous -0.6%).
-Wednesday, Jul Durable Goods Orders (previous 0.8%).
-Thursday, Q2-08 Preliminary GDP (previous 1.9%), Q2-08 Preliminary Corporate Profits.
-Friday, Jul Personal Income (previous 0.1%), Jul Personal Spending (previous 0.6%), Aug Chicago PMI (previous 50.8), End-Aug Reuters/U Mich Sentiment Index.