Thursday, June 21, 2007

Joe Batt's Slam Dunk

As soon as I heard that perma-bull Joe Battipaglia - a frequent commentator on CNBC and elsewhere in the garf-spewing analyst world, was predicting a slow-down in the economy and expectations that corporate profits would wither in the second half of 2007, I knew I was right about the direction of the markets.

Mr. Battipaglia is an analyst for some big hot-shot Wall Street firm (it's really not important which one) and he's famous for being bullish during the entire dotcom collapse of 2000-2001 and forever after. He's actually been on somewhat of a winning streak over the past 3 years, as anyone who said the market would be up was right by default.

To my knowledge, today's prediction by Joe Batts is the first time he's ever hinted at being bearish, and, being such a reliable contrary indicator, I take his negative view as a huge positive "thumbs up" for US equities over the near term.

Today's turn-around, on the heels of Wednesday's baffling downdraft, was confirmation that Joe Battipaglia, along with most other Wall Street analysts, aren't worth a tenth of what they're paid. Many are nothing more than paid shills for their firm's largest holdings and the lot of them wouldn't know a sell signal if it bit them on their dialing fingers.

Dow 13,545.84 +56.42; NASDAQ 2,616.96 +17.00; S&P 500 1,522.19 +9.35; NYSE Composite 9,960.79 +55.71

While today's gains didn't pick up all of Wednesday's losses, it did stanch the selling amid some less-than-positive news (unemployment claims hit a 3-month high and oil futures soared early in the day), so the trend is still a friend, for now.

Beginning tomorrow, the waiting on the Fed game may begin, and the markets may trade in very narrow ranges unless there's some major news or surprising economic reports.

Advancers were ahead narrowly, nearly 5-4, though the spread between new highs and new lows tightened considerably, with 209 highs to 181 lows. Some fluctuation in the high-low scenario is expected and, to some degree, welcome, so the markets don't indicate overheating.

Today's market action could have been tied more than anything to oil futures, which actually fell 21 cents to $68.65 after hitting an absurd high of $69.85.

Gold dropped $5.40 to $654.20 and silver was down 16 cents to $13.09. How many ways can I say "These are bad investments. Sell?"

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