We're getting tired of preaching the message that this bull market needs a correction to repair those few cracks in the "Wall of Worry." We're also a little tired of looking at the deteriorating internals of the market and pulling them out to try to convince the world that the correction has already been in process - in some ways since last November. As last year came to a close, we suggested in our year-ahead guesstimate that 2011 would be a mirror image of what the Herd was suggesting - lackluster performance in the first half of the year with the real strength coming in the second half. Okay, that got off to a rocky start as the media kept telling us how strong the first quarter was...but you and I both know, don't we?
The rally was not really that beautiful. If you took out Energy stocks, which were being fueled by the tensions in the Middle East, you saw that most of those first quarter gains melted away. Industrials did pretty well, but here again, many of those stocks were simply beneficiaries of the rising agricultural and energy prices.
We are enormously bullish, but we want a good solid bull market to return with the traditional growth stocks (i.e. Technology, etc.) to lead the charge - not the commodity-based stocks. And it certainly looks as if the Monetary Composite is going to remain very healthy for a while, so the long-term bull market prospects remain in place. The bull market may be slightly hiding in the shadows right now, but in a few weeks or months, it should be rested and ready to reemerge with vigor for the second half of this year.
All in all, let's let this correction run its course, so that we can get back to our very healthy bull market.
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