Tuesday, June 10, 2008


Is anybody home? Opportunity has been knocking at the door, ringing the bell and screaming the question, "is anybody home"?

Jason Goepfert operates a subscription only web site (www.sentimenttrader.com) that tracks the history of sentiment for as far back as the records go. In a recent study, he found that over the past 58 years there have been 20 large jumps in the unemployment rate. The average market return has been about 25% in the year following these jumps, like the jump we saw last week.

Today, Bush won the assurance from Jose Barroso, President of the EU Commission, that the 27 nations of the EU will go along with additional sanctions against Iran. The 27 EU nations are working with the rest of the world to freeze Iranian bank deposits. The UN agrees that Iran has provided financial support to a number of terrorist organizations. The world wide support for sanctions against Iran is close to being unanimous.

Many of my readers do not believe enforceable peace agreements will be signed in the Middle East any time soon. This is a fair position to take because history is on that side of the issue. On the other hand, there has never been a time when leaders of so many nations were active in the peace process. There have never been so many commercial deals at stake.

The fear that keeps pushing crude oil to new highs is a fear of war. The truth of the matter is that Iran needs the world and the world needs Iran. While we in the process of demonstrating that we can get along without Iranian oil (at least without the sulfur heavy half), we would all be better off if a peace agreement can be reached. No one is trying to take over Iranian oil fields. No one is trying to prevent Iran from using nuclear fuel to make electricity. The Iranian position is untenable. Buy stocks now. You will be rewarded when the market gets around the "Iranian oil embargo" one way or the other.