Weekly Wrap-Up

What a great week! I am so happy we stuck to our guns after that very disappointing Monday session.  Fortunately, after the awful finish the market had to last week , I went into last weekend’s Economic Overview with the full intention of making a bear case for the market going lower and ended up realizing - I couldn’t find one.  As I said at the conclusion of that post:  " So plenty of doom and gloom around but, after two days of reading, I have to say that I still think we have suffered enough.  The fact that there is money out there to pay Wall Street executives 23 times what it costs to feed the nation of Zimbabwe for a year or half of California’s budget shortfall indicates that what we have here is more of a mis-allocation of funds, rather than an actual lack of funds.  For good or inflationary ill, the Fed has a virtually infinite supply of ammunition to fight this downturn and they are determined to use it. " While the markets continued to drift lower on Monday , it was only the follow-through we expected from the previous week’s action as they finished at the bottom of the 5% rule so there was no shock, actually relief, when we drifted down to test -2.5% during Monday’s session.  As I said Monday morning: " We have been playing it bearish since last Tuesday so we’re fine overall and we had NO reason to change our stance into the weekend as we expected plenty of doom and gloom in the weekend news to sour the mood of investors today but let’s take a look at the week ahead and see if we can find a path to navigate out of this mess.  Hopefully we can find a good reason to do a little bottom fishing off our buy list (hedged, of course) and sell a few puts into the morning dip ."  How was that for a winning strategy? I mentioned that the rest of the world was getting on with their bailouts and what was holding our market back was the ridiculous posturing of the Minority Party (ironically depicted here as 4 old white men) as they " vowed opposition to the stimulus plan ," something that they are still doing this weekend as almost-President, John McCain, claimed " the overwhelming majority of Republican Senators are opposed to this legislation . "  McCain’s junior Senator from Arizona and party whip, John Kyl was on Fox news…