Well we’re back. And we find it interesting that despite three interest rate reductions, the major averages are below where they were on the last rate cut of 10/31/07 (this is almost unheard of). Also of interest is the fact that crude oil has declined, yet the D-J Transportation Average has also declined and actually broken below its August 16, 2007 closing low, rendering either one-half of a potential Dow Theory “sell signal,” or a huge downside non-confirmation.
Plainly, since the October “peak” things have gotten pretty confusing, leaving the four strongest sectors since that point: utilities, consumer staples, energy, and healthcare. Meanwhile, the over-crowded negative dollar “bet” has changed the export-import equation, making America just plain “cheap!” The effects can be seen along the Canadian border, in New City retail stores (read: foreigners), cruise lines, Disneyworld, etc., and the result has made us reduce our anti-dollar “bets” of the past six years.
Indeed, things are currently confusing; and we are cautious, totally exhausted, and anxious to catch up, so these will be the last strategy comments for this holiday-shortened week.
Source: Jeffrey Saut: Confusing Times