| home |
parallel lines on our three year charts. This is called our upward channel
and can be seen
in fig.12 on our pamphlet on charting (http://my-broker.com/charting/index.html).
This looks like an uptrend. There is an old saying that “if it quacks
like a duck and looks like a duck” even Plato would believe it is a duck.
We have been saying since our Investment Strategy Letter #519 (Lone Bull October
2002)
http://my-broker.com/lone_bull/index.html that
a new Bull Market is developing which “will give investors many profitable
buying opportunities”. We believe this is such a buying opportunity.
The Correction
The recent decline occurred as a natural reaction to the Fed tightening, oil
prices rising and the economy entering an uncertain period. GDP growth bounded
up to an annual rate of 5.5% in the first quarter, but American consumer markets
suggest a slowdown. A 3% annual growth rate is expected for the second quarter.
According to the Goldilocks story this is “not too hot or not too cold”
and may be just right for the Federal Reserves to stop their consistent interest
rate hikes. There is considerable hope that the Fed will not raise interest
rates for the 18th straight time. However if they do, many analysts believe
a Fed fund rate of 5.5 % will be as high as they go. The Fed may even lower
interest rates by year end if 2007 looks shaky.
It is not unusual for Bull Markets to correct 10% every now and then. We believe
the current correction would have stopped earlier had it not been for the Middle
East military operations and the worry over escalations. It is interesting to
note that while many economists have been bearish about 2006, corporate earnings
are so far growing at some 16%. In addition the private buyouts of Georgia Pacific
and now HCA indicate that American corporations are selling at bargain prices.
As can be seen by our three charts, the markets are currently selling at Support
Levels that should support buying. However, any further downside momentum would
disturb the equilibrium of this four year Bull market uptrend. Continue to go
to our website to view our technical current market comment section for updates.
(http://my-broker.com/market_comment/2006/mc08_16_06.htm)
Note to Media
FOR MORE INFORMATION or to interview Carl Birkelbach on what’s happening
in the markets and why, please contact: Bill Hammons
Phone: 847/577-1932, Email: ewhammons@compuserve.com
If you don’t care to receive The Investment Strategy Letter and Current
Market Comment, please notify Hammons as well.
-- Carl M. Birkelbach
07/25/2006
ADDITIONAL INFORMATION
IS AVAILABLE UPON REQUEST
This report has been prepared from original sources and data we believe reliable
but make no representations as to the accuracy or completeness. Birkelbach Investment
Securities, Inc., its affiliates and subsidiaries and/or their officers and
employees may from time to time acquire, hold or sell a position in the securities
discussed in this report, we may act as principal for our own account or as
agent for both the buyer and the seller.
Past performance is no guarantee of future success. Also, while the above suggested
prices are as listed on our reports and the sell dates and prices are as issued
by our research department, our brokers operate independently and as each individual
client has a unique risk tolerance level, the above list should not be deemed
as a representation of our clients purchases and sales. Some of our suggestions
are volatile and speculative. Therefore, these stocks are only for those investors
willing to assume risk. In addition, there may not be enough information available
in these reports to make an informed decision. Upon request, we will supply
additional information. Purchases should not be made until enough information
is obtained and risks understood.
| home |