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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: GREENLAW4-7 who wrote (119525)	4/4/2009 8:10:42 AM
From: farmerboy	Read Replies (2) \| Respond to of 206143

Green and Archimedes: Are you two going shorter now? Pulse Monitor: citigroupgeo.com Morning Musings: Power of Panic citigroupgeo.com The Power of Panic ? Investor sentiment remains a crucial facet for equity market direction. Our proprietary Panic/Euphoria Model remains in panic territory. Yet, it is above extreme readings experienced earlier in the year, which historically have prefaced a high probability of impressive stock gains in the subsequent six and 12 months. The 25% jump in the S&P 500 is likely to generate some renewed confidence (and more than $1.5 trillion in wealth), but it appears that further gains are plausible. ? Skepticism in the rally remains firmly in place. Given challenging economic times, awful earnings reports and data that is far from encouraging, not to mention defensively positioned portfolios in February, there is a fair amount of disbelief in the move and doubt about its sustainability. Anecdotally, most investors appear to think that they have missed their opportunity and will wait for a chance to buy in at lower levels, which argues that the “pain trade” is for more upside. ? Mutual fund indicators are supportive of further stock index gains. The proverbial cash on the sidelines argument is accurate, but fund managers also are sitting on more cash than they have historically. Moreover, equities have declined to less than 50% of financial assets held by households, suggesting that any desire to lower equity exposure already has occurred unfortunately and some increase is more likely just to return to the average. ? Consensus 2H09 market recovery view could have some flaws. Many investors had argued earlier this year that there was time to buy stocks and one should look for more evidence of economic recovery. Moreover, it was presumed that credit conditions would lead, even as our work showed that credit and equities move in tandem. Additionally, the 2H09 stock market rebound had become the general consensus view. From our perch, there actually may be more challenges in the second half of the year, if the hope for recovery does not materialize as expected but that the “coiled Spring bounce“ could continue until around mid-year. ? Capital Goods starting to look more interesting as de-stocking could ease soon. Given some opportunity for the ISM to improve from deeply depressed levels and the close relation between Materials and Capital Goods stock prices relative to industrial activity, some of the strength in these groups makes sense. Moreover, Capital Goods valuation has improved markedly and we are placing the industry group on Upgrade Watch (currently Market Weight). We continue to be overweight Diversified Financials, Insurance, Energy, Semiconductors, Retailing, and Transportation as means to participate in the market.