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Happy 4th of July to Everyone

God Bless America

As the USA celebrates it’s birthday this weekend, I thought a bit of classic Kate Smith would be appropriate. My internet connection is a bit slow this morning so the buffering was off – I’m sure yours will be much better. Just click on the link above.

Yesterday was a bummer for the markets. Most sectors were down between 2% and 4% based upon the unemployment report showing that the recession is likely to continue for awhile. Consumer discretionary, energy and early cycle stocks got clobbered in what is probably an over-reaction to the report. Next week we’ll see how it all shakes out – there were few people working on Wall Street yesterday ahead of their holiday weekend.

The broader market continues to trade within the range between the 200 day moving average and 950 and energy prices continue in their uptrend inspite of the selloff.

Here is the chart of the S&P 500 Index that I’ve posted several times in the past and you can see that we remain range bound:


Here is the chart of West Texas Intermediate Crude with the trading range drawn in:


Even though there was a lot of pain yesterday, it was a thin trading day and neither the broader marker nor the commodities broke into bearish territory. We will continue with our current strategy until we see that the trend is broken. The old adage “the trend is your friend” still applies.

Enjoy the holiday and please keep in mind that no matter what is wrong with our country and whether you agree or disagree with the political direction it is taking, the USA is still the best place on Earth to live.