A look back at what I thought about how this year would go, "reprinted" from this weeks Journal commentary:
After six months of 2002 it is time for review of my thoughts on the year. I listed "Sam's Seven For 2002" during January. It is time to review, chew and cuss a few. Not that I'd change much a better market couldn't do for me <g.
1) The federal funds rate will end 2002 between 2 3/4 and 3.25%. Increasing from the current 1 3/4%.
We have six months to make a point in fed funds, doesn't look like it will at rise this year, now. There seems to be little worry about the spread between what you can make on your money and inflation at this point. And that is why I expected an increase.
2) We will be out of the recession by the end of April.
This was a done deal, too bad we weren't out of the bear market at the same time.
3) Inflation will stay relatively flat at 3%.
So far this is on track.
4) Unemployment will remain between 5.5 and 6 percent during the year. Relatively high.
Again, this is right on track.
5) Energy issues will likely get a lot of talk, but much less action, and we'll end up finding we had a uneventful year regarding pricing.
Again, so far I see no changes to this.
6) Strong industry groups: Aerospace Defense Equipment, Brokerage, Computer Memory (storage), Consumer Electronics, Consumer Electronics Retailers, Electronic/Scientific Instruments, Homebuilders, Home Repair Retailers, Home Furnishing Retailers, Medical Software, Semiconductor Equipment Manufacturers.....and Biotechnology will have a weak first quarter and a strong comeback the rest of the year.
This one has a few weak links, Computer Memory? Why did I think that? And the Biotechs have yet to turn the corner the best I can tell. I'm still looking for a stronger second half in that group.
7) The stock market - Up 5% on the NYSE, 7% on the NASDAQ but once again the Russell 2000 stocks will have the strength, up 12%. Okay, Okay, this is just a wild guess as I'm for various reasons, bullish about the year, but don't believe anyone truly knows. However, my true prediction is that it won't make a bit of difference where the market goes, but that you'll beat the market or double the percentage gain if you only trade when the Screened Stock Ratio is positive.
Ok, well the screened stock ratio has been negative for the last 27 consecutive days and counting, starting out this week at -1.83 after breaking its local low last week (-3.13 is the low now), the best projection I can make is that we will see something over a -4 before all is said and done.
Have a good week,
Sam
Sam@savvy-trader.com
