Time To Kick The Sand Out Of The Shoes.

When I worked for Alex Brown (OK I know it was actually Bankers Trust and then Deutsche Bank but we still thought of ourselves as Alex Brown) our boss in Baltimore began the 1st Monday or trading day after the Labor Day with a "Let's Go Get Em" speech. It was a let's get out of the summer mode and get back to business talk that he called "Time To Kick The Sand Out Of The Shoes". This speech in various forms is being given all over Wall Street this week. Now as summer ends, the A team investment types return from their various late August watering holes and start to get serious about the markets again. Their first order of business will be to see what summer has left them and how that bears up in relation to their portfolios. 2nd will be the awareness of the typical early fall weakness in the markets. Finally will come positioning for the end of the year.

They will be aware that the rally we have seen in this summer has been on low volume and that a low volume rally in the dead of vacation season is not the stuff that usually leads to large bull market gains. Like me they know that all of the major indices are extended and vulnerable to profit taking. Balancing this out will be the continued decline in oil while the recent strength and the high level of skepticism could provide some fuel for the upside.

I have stated that I am more cautious at this time mostly because of how equities have moved in the last 6 weeks. However, caution places me in the wait and see mode. I think we will see in the next couple of weeks if seasonal tendencies are going to kick in. If this is going to be the case it will start to show up in my indicators and we will be able to take action then based on the individual requirements of our clients.