Monday, July 14, 2008

Stock Market -- Position Overview

Our previous newsletter, dated June 10th, stated that the stock market appeared to be resuming a broad bear market decline, and we forecasted a DOW trading range for the month between 11,300 and 12,625. The actual result saw the DOW, along with the other major stock indices, resume the decline, producing a DOW trading range for the month between 11,287 and 12,610 -- a very accurate forecast.

The US dollar was projected to remain under pressure, due to the unsuccessful attempts by the Federal Reserve to stimulate the US economy, and we anticipated a euro fx equivalent trading range for the month between $1.53 and $1.58. We saw the US dollar continue to decline, with a euro fx equivalent trading range for the month between $1.5266 and $1.5730 -- a very accurate forecast.

The US treasuries were expected to be price-supported, as they remain a safe-heaven during these uncertain economic conditions, and we projected a peak-yield for the US 10-year Note at 4.05%. The final result saw the US treasuries exposed to both inflation concerns, putting pressure on prices, and safe-heaven price-supporting as well, causing the US 10-year Note to have a yield range for the month between 3.90% and 4.24% -- a somewhat accurate forecast.