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Buzz and Banter



I feel compelled to respond to John's post to me yesterday regarding my article on the Euro and U.S. Financial markets relationship:

• It is ALWAYS a poor idea to base a view on one sole data point. I have tried over the past six months to give a number of stated and backed up reasons for my views. I will be right and I will be wrong, but it will ALWAYS be backed up. I know from experience to not use my "gut feel" - the market frankly doesn't care what my view is.

• I also agree that the financial markets are not always linear - "not always" doesn't translate to never. There is no question that people "data mine" and state an opinion and then find data to support it. Hopefully you know that isn't what I do. Truth be told, until this year, a rise in the Euro had been a negative for U.S. based Financial Assets. What caught my attention was that it was different this year and the relationship was very clear and identifiable. When a major change happens in my view, it should be pointed out.

• In addition, I believe it is important to be careful in NOT drawing any conclusions about the direction of a security (or market) based on Macro variable. The more variable that can be used the better. That is why I use fundamental, technical and intermarket analysis in my work. This Euro piece was only meant to show a shift and act as another piece to a giant puzzle.

I am doing a CNNfn guest host gig today from 9-10:40am EST. I would also like to repeat what I posted last week...I believe the market is in correction mode but the pullback should be limited in price and time. The market is clearly overbought (on all three time frames) and as my "Turtle vs. Hare" piece suggested on Monday, the best performers for a while could be those stodgy "biggest of the big" type stocks that have so significantly lagged their smaller and mid-cap brethren.

Most agree regarding the correction, how one treats it should be based off time frame of view. Mine is intermediate-term, so rather than focus on a 4-7% pull back, I am focusing on the "other side" of it.
Don't worry Daisy, I told you Rhonda is just a friend.
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