Well our greatest fears were relieved yesterday as the financial brains at Merrill Lynch B of A claimed that they were seeing sure historically proven technical indicators of a pullback from 4%-7% short term in the Dow.  They expanded on this with the possibility of inflation rising and the dollar gaining in value.  There has been a great brain drain in the US Securities industry obviously.  Do they need read the same news we do with the Fed stating it will keep rates low for the foreseeable future?  This article was very troubling to us as we ARE Market Historians and were quite partial to the claim that, “…historical data proves that…”  We find this very troubling as even the analysts have jumped on the US Press Junket of scare tactics to get news in front of our well trained lemming mentality.  On the other hand, we absolutely love this news as we know there will be selling into what we see as continued irrational exuberance or the Goldilocks Market as Kudlow so enjoys stating.  We continue to firmly assert that there is no better asset class to currently invest in than US Markets.  It’s easy to call overbought but can these over paid drones ever look past the numbers into the Historical reasons behind the continued market moves?  I don’t remember one of these “Market Genius Analysts” coming out with Dow 12,000 in February when we stated our official Dow year end numbers.  In fact, the market sentiment was negative predicting a move to test the lows of 2009.  The brain drain is to hedge funds, private equity groups and hybrid investment vehicles that are now considered less risky career choices than large investment banks despite frightening attrition rates.

To answer the question forming in your mind the above paragraph has everything to do with the Green Industry.  We have been working diligently to find parallels between the Green Sector and past Market Bubbles.  A consistent theme that has continued to appear is the inability to place an accurate valuation of Green Sector Companies as the Government incentives often create uncertainty in regards to tax treatment advantages and how they will be reflected on balance sheets.  In addition, we have cases such as FSLR a stock that took off and defied any logical trading pattern becoming a day traders dream.  We often enter the market through futures contracts and often place these on indexes or sectors.  The stocks in the Green Sector that peak our attention are now being run through filters to see if it is possible to find the next FSLR.  Irrational Exuberance is the friend to those who own out of the money calls.  At this point we are not considering any short positions against the Green Sector.  Even if there was a significant market correction, analysts would come forward to make the case that the Green Sector still has legs because of available tax credits and the ongoing development of new technologies.  Next week we will break down two or three technologies or opportunities we find particularly interesting in the Green Sector.