Zeev's Turnips Patch-No Politics (ZEEV)

[Zeev Hed]

If it indeed happens, it will be a combination of a variety of factors, both economic and political. The lower crude prices resulting from a victory in Iraq will already be fully discounted, but the political uncertainties and strifes in post war Iraq between various factions will start and be discounted. Other hot spot will come back to the surface, earning seasons will bring back the reality that consumers are stretched, trade balance deficits are going to weigh on the dollar (bringing gold back up and causing additional flight of foreigner investors). One can find just as many "rationalizations" as to why prices could go up in the same environment (I have gone through that exercise in #msg-788375. The reason I am staying bearish here is not because of the fundies, they are actually slowly improving (paradoxically, the worst the economic environment the better are the chances for the start of a new cyclical bull), but the technicals underpinnings of the recent run are poor, and I believe that sentiment wise we may have already peaked (price wise may take a little longer as it did in early January and late February). We had an up day today, we are not too far (maybe 30 Naz points) from the recent peak, yet volume is lagging and new highs, well....

Zeev