Computer Problems

We are in the process of installing new systems at "Global HQ"and have been doing so since last Friday.  These are ultimately going to mean great things for us but right now we're going through some installation pains.  Posting will be limited until we get these up in running.  Up in running will depend on us getting these machines to talk to each other.

Here is a quick market update.  In my  opinion almost nothing has changed regarding our markets except if it is possible investor sentiment has worsened.  Markets seem to lurch from one big economic number or benchmark regarding Europe to the next.  Markets are slaves to what is going on in Europe and so we go up one day and then give all those gains back the next.  Having said that stock valuations are cheap and that seems to be putting a floor under stocks right now.  It strikes me that we are either going to have one huge rally of longer duration than a few days or markets are beginning to discount a recession.  

Problem with the recession scenario {at least as it applies to the US} is that the economic data simply doesn't support that at this point.  I'm beginning to think the scenario where markets rally into early July then stall out and have one final wash out over Europe going into the statistically weak August-early October period is the most likely script going into the summer.

If markets follow this pattern then I think the S&P could rally into a zone of 1370-1400 over the next 5-7 weeks which would be a rally of 3-5%.  Note that I said that markets COULD rally to this point, not that they are going to do so!!!!

Of course this thought process could be completely off base and we will adjust accordingly as facts on the ground tell us what to do.  In particular, as we've recently indicated, we have the defensive pages of the playbook ready in case things begin to head south from here.

*Long ETFs related to the S&P 500 in client and personal accounts.