Last week witnessed more stock market weakness as the Nasdaq 100 Index fell 1.23%, the Russell 2000 slipped 0.95% and the S&P 500 Index got nipped by 0.06%.
However, all three of the losses for the week would have been much larger had the stock market not rallied significantly on Friday. Friday's rally was apparently in response to a "in line" core consumer price inflation report of 0.20% for the month of May 2008.
We would argue that the stock market had become oversold, highlighted by a smattering of heightened investor anxiety readings as witnessed by our investor Sentiment Indicators.
Also, of note is the fact that the yield on the US 30-year Government Bond climbed to a level of 4.80% on Friday. We would like to see the yield climb another half a percent or more before we anticipate the stock market would have significant trouble digesting the higher interest rates.
We wish you continued good luck with your investments in the future.
Sincerely,
Anthony Waller
President
Teabull Asset Timer Ltd
www.timingequity.com
