From the Desk of Michael McDaniel

(2/9/2010)   - February 5, 2010 Recently stocks (international and domestic), precious metals (Gold/Silver), and oil have dropped substantially. As I suggested in my 12/2/2009 market commentary “I believe that the value of the US Dollar (or lack thereof) is determining the direction of the US market more so than earnings expectations.” The US Dollar has rallied substantially since my December comments and assets valued in US Dollars have dropped significantly. I had hoped that the FED would signal a rate increase as the catalyst for improvements in the value of the US Dollar. Instead, debt fears around the globe have once again caused a flight to safety; creating demand for US Treasuries/US Dollar. A distinct stock market rally has been in affect since March of 2009. Recent stock market losses have broken some technical resistance levels; which indicates that the trend from March of 2009 may be nearing an end. If the Standard and Poor’s 500 closes under 1,000 I would declare this trend “done.” What will the next trend be? The questions guiding my investment actions in the short term are: 1.) Will the debt problems in Greece, Spain, etc continue to dominate the news? 2.) How much will the US Dollar rally? 3.) Will our current earnings season provide reason for optimism? 4.) Will the FED signal a rate increase? 5.) Will Domestic unemployment #’s improve? We have tried to allocate our client portfolios in a manner that would take advantage of a continued stock market rally while not ignoring the aforementioned risks. If you would like an analysis of how much “risk” (as measured by standard deviation) your portfolio has, please let us know. If you feel a need to have a detailed review of your portfolio please let us know. *The opinions voiced in this material are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.    Michael McDaniel   [view previous Messages from Mike]