August 11th Edition

Good Morning All,

The S&P 500 held above its newly acquired recovery high of 1000 plus yesterday, despite a bout of early week profit-taking. The question now before us is no longer about 1075 by early September, but rather, how much sooner and how much higher? The Fed will meet over the next two days and will not likely change anything or affect markets one way or another. This market is about momentum and unused cash, and until the latter has been somewhat exhausted, the momentum will continue to drive prices upward. Favourite groups are still those I noted last November/December although many other sectors have since joined the fray. Stem cell stocks and other small biotechs have enjoyed a strong summer and I suggest you refer to my list. Opaxa, another stock I own and follow, rose over 400% on Friday after announcing a deal with Novartis. There are many similar buyouts in the offing, as this multi generational opportunity plays out.

I reiterate the opinion that this is shaping up to be a normal autumn prefaced by the current summer rally. Serious profit-taking may make the latter weeks of September fearsome...so be nimble of mind and remember the real lesson of these past two years. Market direction is the only thing you need to know, and for most of us the long term is in sight.

Commentary

The town hall meetings on health care now taking place in the United States have brought much of the Republican leadership to the depths of depravity. Mob rule is a very scary social condition at any time, but when it is encouraged, not just by the Rush Limbaugh assholes of America but by many in elected positions, it can be doubly dangerous. Much of what is going on may even border on sedition. As a Canadian who is well versed through experience in the plusses and shortfalls of our Medicare system, I find the constant misrepresentation of the plan both repulsive and insulting. I am also fearful for America and for the safety of its first adult President in many, many years. This is all beginning to look like an old western movie, you know, the one where the bad rich guy stirs up the lynch mob. Essentially this debate is about the non-inclusive insurance company bureaucrats versus the government bureaucrats. Weirdly, many of those opposing the health care initiative have no insurance themselves. Let's hope that there is a Hollywood ending to the script.

On a more practical front, it would seem that the combination of anti-Sotomayor votes and this continued assault on sanity and conservative principles will further isolate the GOP. Just Google Sarah Palin's comments on health care and as you do, wonder what might have been...I shudder still.

And finally, for all you conservatives out there who disagree with the foregoing...reread Edmund Burke.

Bill Copp
Montreal , Canada
August 11, 2009