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The big concern on everyone’s mind at the moment is the meltdown in the subprime mortgage sector, resulting from an increase in defaults. While we feel sorry for the thousands of people who have lost or may lose their homes, we take comfort in our belief that the crisis is a little overblown.

Keep in mind that the subprime mortgage sector is a fairly small part of the economy. Compared to the last time a real crisis occurred in the real estate industry, back in 1990, today’s crisis will amount to little more than a real blip when all is said and done (really).Read more...

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As expected, the highs keep rolling in these days. Last week was the third in a row that the Dow made an all-time high. It’s now just 20 points away from the 12,000 mark. The S&P is climbing strongly too, setting new recovery highs each week.

Is this the start of a new bull market, or just the last gasp before a renewed bear? Only time will tell for sure. In these updates, we only deal in probabilities, not certainties. And right now, according to our technical indicators, the most probable short-term action is higher share prices. This bodes especially well for the big cap, quality stocks we’ve been encouraging you to invest in, such as Johnson & Johnson (JNJ), United Parcel Services (UPS), Eli Lily (LLY), General Electric (GE), Intel (INTC), and Microsoft (MSFT). Most likely, they will lead for the remainder of this rally.Read more...