Dow in the Black for 2006

So, the Dow is in positive territory for the year as of today.  Now, I get all the bullishness.  Or maybe I don’t get it.  It appears that the market wants to edge its way up to get the Dow to a new yearly high but the excitement of just eking out a positive return for the year today just leaves me cold.  

You have been given a good opportunity to sell into this excessive up move so I hope you take the opportunity to do just that.  With the end of the year approaching, there is hardly a bear in sight.  It reminds me of ‘Twas the Night Before Christmas, no one was stirring, not even a mouse, no bears either, they’re all in hibernation.  I know it doesn’t rhyme.

Out in the comments, Erick has left us another question/statement that I’d like to comment on.  He asks if the Global economy has entered a period of market diversity that squeezes out the idea of recession.

Our answer is that the US as a whole has paid for no recession by borrowing money.  The account balance with the world is extremely negative and that fact alone has helped the rest of the world stay out of recession.  We keep buying foreign goods and they have kept buying our debt with the money we spend.  The rest of the world is more than willing to take our money and give us their goods, especially China.  We, here in this country, have been borrowing money to support our spending habits and have not let the economy suffer, just our balance sheets.  I say that in terms of having moved into home equity lines of credit or simply refinancing to get more money.  As housing prices have advanced that has not been a problem; but, now that housing prices have come in a little, there is a danger that the consumer may pull in their horns.  Christmas is right around the corner and the consumers will show their hand.  The holiday shopping spree may still be intact but the heating bills are coming to put a dent in the consumer’s spending habits.  I say, the day of the soft landing here in this country is probably behind us, 2006 will be a very challenging year.  (Erick, sounds like you had a nice trip including all the biking.)

Dow Industrials:  10,820.28   +53.95
RYVNX:  18.69
TLT:  90.41
BGEIX:  14.02  (gold stocks are at yearly highs too)