I recently started a formal money management business which is allowing me to see things about the market from a new and different vantage point. One of the things is the end of quarter manipulation that often is discussed. As a money manager it is much clearly to me know how tempted some managers must be to drive up some of their holdings into the end of the quarter.

Over the past several days I indicated that I thought we should see some window dressing as the quarter neared to an end giving us support despite the challenging economic picture. I believe very strongly that this was the case today, and took the opportunity to raise my cash levels.

 Make no mistake about today’s action. Despite the Dow closing strongly, the average American will still spend close to $3.00 per gallon this evening and have to decide whether they will be dining in or dining out. On their way home they will see an increasing number of for sale signs in neighbor’s yards, and when they open their equity loan statement they will be writing a much larger check. Regardless of our desire for the markets to head higher, I simply can not shake the feeling that the average consumer is becoming tapped out and sooner or later we will have to deal with this harsh reality.

I believe that the end of the quarter action is giving us an opportunity to take some cash off the table and move to the sidelines. If the market was in better shape technically, I would be inclined to feel better about today’s action however with crude oil staying strong at the same time the market is strong it seems clear that this is simply end of the quarter adjustments.

 Earnings season is quickly approaching and the proof will be in the numbers and guidance reported by leading companies. I suspect many companies have been struggling this quarter and will place blame on a hurricane or energy costs. Regardless of the reason, I believe expectations will be lowered and stocks will become much more attractive into the fall. It’s time to become more cautious and it would be a mistake to be fooled by today’s strong action.

It has been an honor to begin contributing to TSP Talk. While my investing vehicle, individual stocks, is much different than the options within your retirement plan, we still swim in the same financial ocean and I hope I can assist you navigate these treacherous waters with a bit more confidence. Please feel free to contact me directly at any time with topic ideas, questions or comments. RevShark@SharkInvesting.com

Have a good evening

 RevShark