Enough With The Green Shoots

When we first started this blog we used the term Tea Leaves to imply signs of economic strength. However, most columnists and reporters have been spouting about green shoots. The economy is still in bad shape but optimism has risen with every green shoot that appears. All investors are searching for the turn of the economy to positive trends but the green shoot zeal may cost investors money if growth doesn't reappear in the next six months.

We remain in the camp that disaster has been avoided (so far) in the financial system but economic growth is not in site for 2009. Stocks were dragged down in early March to levels where disaster was priced in. Stocks then rose dramatically to reflect the sigh of relief. Suddenly, we have begun to see more volatility in the markets as investors may be questioning their optimism. Today, Jobless Claims for the week of June 20th were released and they ticked up to 627,000 people. Obviously, the bull is not around the corner but the bear market rally may have peaked. Only time will tell but we remain cautious and for every green shoot, we still see a weed.