Rebound City

Turnin', turnin' love keeps a-burnin'
like a fire in my heart when we're apart,
but when we're back together,
you keep changin' like the weather.
Whoops! Now up and down like a yo-yo.
Just like a yo-yo.
- The Osmond Brothers (1971)

Got that yo-you feeling in the stock market? How about in the dollar?

Stocks got hammered Tuesday but it was time for some religion as I said in today's Barron's Online column. And now let's talk about China. Monday, I wrote a column touting China as a good place to be - money wise - albeit a short-term overbought place. Then they go ahead and raise interest rates sending Chinese stocks here reeling.

It is a good thing I am getting numb to the market throwing eggs at me the day after I write something. But the long-term analysis trumped the short-term knee jerk and most things China rebounded fully. A few stocks I mentioned Monday even hit new 52-week highs today.

I won't break my arm patting myself on the back. I was two weeks and a big move early on calling for the dollar bounce. And the long awaited selloff in gold went just far enough to stop me out even though I think 1500 is coming.

And need I say I can't break away,
you control every little thing I do.
I used to be a swinger,
until you wrapped me 'round your finger....
Just like a yo-yo

But let's retreat into the only market that makes perfect sense. Two-year yields hit another new all-time low.

I used the word "kerfuffle" in the previous post. When the liquidity pump stops pumping, try "degringolade" on for size.

Look that one up in your Funk & Wagnall's
- Dick Martin