The market backed off a little last week, and it could show weakness for another week or two. Not that there’s been a sea change – stocks just became temporarily overbought. However, technically the market is still in great shape. The uptrend in bonds is intact. Specialist shorting remains low. Measures of investor sentiment still point towards higher prices. (Put/call ratios are extremely high, for example.)

Baring a huge surge in oil prices, these figures suggest that the current weakness is a buying opportunity in stocks. At least if you’re looking for short-term gains. But until oil and inflation break free of their reins, you may as well make some money.

THE GUILT TAX ON HYBRID CARS

Last week, I gave you my firm prediction that gasoline prices will rise as high as $5 to $10 a galloon over the next few years – a move that will bury the U.S. auto industry.

I realized at the time that such a bold claim might shock a few of my readers – as it indeed did, judging by some of the comments I received.

Believe me, I will be as sorry as anyone to see GM and Ford collapse because of spiraling gasoline costs. Nothing was more deeply associated with the greatness of America in the 20^th century than the American automotive industry. Nothing gives an average man more instant status than driving a big, luxurious, powerful American car.Read more...