All,

There is a little tropical wave out there in the Eastern Atlantic:

http://www.nhc.noaa.gov/

He/She is expected to have a low chance of developement into a tropical depression over the next 48 hours but he/she is at the right latitude and moving in the right direction at least. The last 10 days have been characterized by very low levels of wave formation in the Atlantic and, indeed, the CSU Hurricane Center this AM downgraded this season slightly from 11 named storms to 10 and have declared that this should be a lower than normal season for the creation of tropical depressions in the Atlantic. I think that that idea was mentioned here a month ago based on the experience we've had this season and based on the typical El Nino effects on hurricane seasons (Westerlies tend to both sheer off the tops of hurricanes and bend them northward before they reach either the US or the GOM.).

That should be good news to Boudreaux who has now had plenty of time to sharpen his chain saw. If only he could get some nice cool weather when it would be pleasant to work in the woods.

The broader market is behaving just fine this am and it is not hard to figure out why--financials are taking the lead. FAS is up more than 4% again today and fast approaching 40% from the point at which it lingered at the 50 DMA. It and its cousin FAZ are wonderful vehicles for timed cycles. FAS is, however, now in overbought territory. This is a common message across positive acronyms and needs to be remembered. We can remain overbought for considerable periods of time, but the risk of a reversal is heightened during such periods.



Regards,

Peter