Market Views Thursday

The bulls have the bears retreating, and we have begun the "good 6 months" historically of the market, so those in the know are and have ben getting long.

Volume on this move has been heavy, so it must be respected. Transports spike above 4,000 today a new all time high! This throws market oddly enough, OUT OF SYNCH. Under Dow Theory when the Dow and Trans dont move together, you must beware. That is not to say the Dow will not make a new 2005 high, bu it is a ways away. Utility index also is under its 2005 highs. NAZ is leading % wise, the high beta stocks, willingness to take on risk is returning as the VIX melts away. GOOG at $380 a sign of that, $105 B mkt cap.

STill not a single week of bearish plurality in over 155 weeks. Only 9 weeks since Bear Market began in 2000, sperated another 150 week string.

The setup, potential for a come back in consumer sentiment, who wants to be blue for Xmas, I personally knowmany hurting andworried about high winter heating bills and energy costs. There is good reason WMT plans heavy discounting for XMAS starting very soon. I suspect XMAS retail will be better than expected, people will be willing to pile on even more debt, they always do.

Oil is steady near $60, but could continue to fall, already gas prices have fallen substantially, could add to cheer.

Finally, the wild card is interest rates, rising near previous 4.6% high, I wonder if it can take it out, bullishness towards bonds has melted away, setting up contrarian move, it hasnt shown yet.

But what other than sentiment is catalyst to get jiggy with bonds? The stronger the economy is shown, the less likely a flight to quality will occur.

FED futures suggest 3 more rate increases.

Many still point to Katrina spending as impetus to stay bullish.

If 10 yr breaks out above 4.6% it could spike much higher before retracing, a move such as that would crush positive momentum, and being SO CLOSE to it as we speak, I find it rather odd, the market is shirking it off....because who can see the future?

I leave little hope for any meaningful change in tax code, who is going to touch sacred home interest write off?

ATM tax is coming to MILLIONS of middle class taxpayers, so something has to be done, some kind of trade-off. Have your hand on your wallet, under this adm, the wise guys always come out on top in Cronyville.

A FED that continues to liquify the cash market by operating its printing press around the clock, further exagerating the imbalances in our economy that already exists. We bounce back bewteen ASSET inflation from housing inflation.

Our GDP ismostly Gov and COnsumer spending, so we have a consumptive economy, we go deeper into the 3rd world hole. Because we cannot do any of this from savings, because we have none.

Foreignors now own near 50% of our debt, and they are buying us a piece at a time. WE can NEVER hope to pay back $7 trillion in debt, trade and deficits.

NOT a single spending bill has been veto's by BUSH a first! LOTS of it going to his Crony pals.

Housing has not crumbled and maybe it wont, but that is one EXIT that wont accomodate a hasty retreat.

Everything is not as it seems, and go ahead get seasonally bullish if you must, but equilibrium under our currents ystem of imbalances and historical distortions is going to be a hose of pain when it comes time to pay the piper.

D Am I the last bear standing? *(No posts FRI or this weekend)