So the FED produces the expected ½ point cut and the market rallies. Hummm I am not sure if this is a case of “ if it cant get any better than this it can only get worse “ ? or and example of the old saw “don’t fight the FED” . X all the big banks and financials, builders, realestate and a few others current technical seem to be shaping up. I have noticed that last years losers seem to be this years post emergency FED shooting stars. Unlike, many I would be looking to new market leaders instead of a resurrection of the justifiable beaten down sectors. My problem is that on one hand I have learned never to fight the FED, but I am not seeing solutions to any of the current banking problems and perhaps to some extent these problems have gotten even worse as the regulators swarm. I am also not sure that this post Volker- Greenspan FED has managed to build the confidence that the two previous FED’s have mustered. So I remain bullish on energy, utilities, gold, agro, international large construction and anything that spells exports for the US. But I remain very skeptical about the mounting sub prime debacle and what it means for the financial sector. And I still remain very negative on the leadership issues in the US and finaly I find all this cheerleading for the financial sector a bit unsettling .So I am sticking to the sector picking story for now .Focusing on areas that benefit from a weaker dollar ie..that mean stronger exports and lower consumption .
James J Foytlin