During
the last 6 weeks, stock prices, the bond market prices, and commodities prices all
declined.  This simultaneous decline is
rare.  It has occurred on only 3
occasions in the last 40 years for this length of time.

Their
decline was tied to one concern – the suspicion the FED will soon end its period of easy monetary policy.

We think the reaction
is overdone.  See the commentary below under
“The FED and Its Policies” for more details. 
We believe the stock market will rebound because the 3 factors that
generally support it are strong (see the “The Heat Map” for these three
factors).  Over the next 3 to 5 weeks, we
suspect interest rates will drop, bond prices will increase.  However, in the long term, we suspect
interest rates will trend higher and bond prices lower.