Fwd: Market Update Commentary

[David Slimp]

Here's what my stock advisor says:

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Date: Feb 28, 2007 3:24 PM

Hello David: Here is my reading on the market and my planned actions for this coming weekend… First of all, we could easily see another sell-off this week. Today was a decent rebound, but money is still not flowing strongly back into the market. I would not be surprised to see another shoe drop by the close on Friday. Having said that, I continue to hold to my opinion that it is unlikely that the market will experience much more than a 5% correction before moving back into Bull mode. Yes, there are the nay-sayers who are like a stopped clock… it has the right time twice a day (or once a day if it's digital). So, we could see the commencement of a Bear market; we could slip into a Greenspan recession. But, I think the odds are much more in favor of the market continuing its upward climb. There is an interesting phenomenon occurring in this market… the higher it climbs the less expensive stocks are becoming. This is because corporate profits have been climbing at a faster rate than stock prices. So, stock prices have gone up and stocks have become cheaper to own; on a P/E comparison. This is not indicative of a market that is on its way down. Once P/E's begin to catch up and move up faster than stock prices, we will have much more reason to worry about a major reversal. Could we have a reversal; and a significant one? Absolutely! But, I don't expect it any time soon. For the time being, I don't plan to jump back into the market immediately. If the market shows strength through the end of this week, I will be a bit more aggressive in my buys for this coming week. If the market shows continued weakness, I won't be as aggressive, but I will still (most likely) be a buyer on Monday.