June Scorecard.

All of the major averages posted mixed results for June. The S&P 500 {SPX} ended the month essentially unchanged. It is down 1.7% on the year. The Dow Jones Industrials {DJIA} lost 1.8%* for the month and is negative 4.7%* for the year. The Nasdaq Composite was down .56% and has lost 5.4% in 2005. All three of these indexes have cumulatively posted flatish returns since their highs in the 1st quarter of 2004. Stocks basically have chopped around for almost 18 months, essentially going nowhere while consolidating their large 2003 gains. Only the energy heavy SPX is higher than it was in 2004. The average stock according to CNBC has lost 5.5% in 2005^.

I will try to post pictures next week to illustrate the state of the markets. Only the SPX managed to get near my forecast of break even by midyear. I did flag on June 8th that rising investor confidence could signal near term weakness for stocks. All three averages have struggled since then. These numbers are still signaling high levels of investor complacency.

I will also be posting an important series on what I think is likely to happen to the markets for the rest of the year and what we are going to do to try and take advantage of that so stay tuned. As a teaser, I think we are on the verge of some sort of market change.

In the meantime Happy 4th of July!

*Source: Investor's Business Daily, July 1, 2005. Worden Software. Returns are not calculated with dividends.
^Source CNBC: Closing Bell, June 30, 2005.