Market Comment

Market volatility has been in steady decline since the huge spike recovery from the low that occurred in mid-2002.

When markets fell sharply at the end of February, they were out of gas, and had nowhere to go on the upside - stuck riding along resistance trendlines in long term uptrend channels.

As I see it, the late February setback was the first leg (A) in an ABC intermediate term correction that was due in order to clear the air in an otherwise healthy market environment. If I'm right about this, it could take weeks to complete the reactionary "B" wave, before a "C" downwave can get underway.

Market Comment (S&P 1383)

On January 7, 2007 in my Market Comment, I said I thought we were passing a short term market high for markets in general. At the time, I said "cash is king".

Now we are past the short term high, and well into the correction that I had anticipated.

Market Comment - Interest Rates

For some time I have assumed that we were heading for an interest rate spike to top off this economic cycle. As expected, short rates have stubbornly refused to fall, until now.

Now, the whole interest rate house of cards may be unwinding. Short rates are falling, and I have to concede that we could slide into recession without seeing a rate spike.