Leading stocks continue to be marked down. The major indices have suffered a series of serious blows. At least the good old names like Apple (AAPL), Research in Motion (RIMM), Baidu.com (BIDU) and Google (GOOG) have not yet been knocked below their most recent consolidations. New bull markets are characterized by NEW leadership, and SCORES of growth names breaking to new highs together. Unfortunately, this is definitely not what we are currently witnessing.
The old leaders had staged a strong run over the past months. Names like MasterCard (MA) and Sohu.com (SOHU) added much needed youth to an aging list of glamour starlets. The market needs a long new list of glamours to lead it higher. I do not know where these stocks are going to come from. There is much talk of the "New Tech," First Solar (FSLR) has been a favourite. The only problem is, FSLR and company have been marked down with everything else.
Deteriorating credit conditions and fantasy financials from firms like Bear Stearns and Lehman Brothers (LEH) provide an ominous background to an otherwise frightening market. Why risk capital in an environment like this? Better to sit in cash and wait for better times ahead. Even better yet, visit the beach or a national park, the world is a wonderful place, even when Wall Street is falling apart.
I would not personally own Lehman SPDR 13 Month TBILL (BIL) as there is unknowable risk in the Lehman name right now. BIL is the closest thing to cash on the equity exchanges. A Fidelity or Vanguard money market fund would be a much better choice.
$45.815 (06/09/08)
