here's my Newsletter from Sudnay...
JERRY OLSON'S
"POINT" OF VIEW NEWSLETTER
DATED JULY 22ND 2007
HERE COMES THE CORRECTION
Hello out there all my cyber trading friends from around the globe. I hope this newsletter finds you and yours in good health and spirits. Gee it's hot here in Philly and the tourists are all over the place going nuts.
The markets have started a long awaited pullback that will be short and sweet. The "pause that refreshes" it looks like to me. When i show you all the P&F charts of all the indexes we watch many of them have not even reversed down yet. I'm telling you all they will this week into the end of July as we make the cycle lows expected by the last week of July to the first week of August. I told you all about interest rates right? They are starting to fall because of the major drag now forming in the housing market as mentioned adroitly by our esteemed leader of the FED Mr. Ben B. In his testimony in front of congress there was little doubt about the trouble up coming in the GDP growth outlook despite the jawboning all last week from "other" Fed guys. They're out there in force trying to put a smile on this pig that is not going to happen. The bottom of the housing decline is far from over, as well as the "sentiment & perception" about the sub prime current debacle. Heck it's on the airways every minute with CNBC talking about it none stop. So if it wasn't a big deal at one point, everyone and his brother is trying to jump on the bandwagon and talk about how terrible this all is and where it's leading the banks and lending communities.
In point of fact the Fed Chairmen said exactly what we all think and know, the sup prime area is very important for people that want to buy homes and need mortgages to get in these homes that are available now.. I think it's ultra important since everyone should own their own home as soon as they can get a loan. While the housing market is down like this, trust me it will be back up and over the top all over again once this down cycle ends next year or so. Like we all know and have talked about forever it's the ebbs and flows of the markets, but that means all markets not just stocks or bonds. It's truly an amazing event when you see these charts start to come alive like the TLT or the US U7-- T-Bond futures and the TNX & TYX reverse back down here. It's interesting too the FED is definitely on hold right here but all of a sudden Fed Funds Futures has blipped to the side of a cut now by 28% which was none existent till last week.
This economic picture while terrific on the employment end, is getting a bit long in the tooth if you ask me, and the GDP that everyone is guessing will be at 3% by years end, might get a really big surprise on down this murky road. The internals of the housing markets trickle down effect has yet to hit as hard as it's going too. Hence when CAT came out and missed earnings sighting housing as the culprit that was a bell ringer for "other" domestic corps to be getting hit even harder now. Cat is a multinational so other areas picked up the slack but not enough actually to make them more profitable. Interesting times we all live in folks. So we'll watch the decline coming now and see where the buyers reappear. You should be fine at the moment since we are still in an uptrend till it stops!
