The Fed wrapped up its regularly scheduled meeting yesterday afternoon and the market's initial reaction was slightly negative with the markets sliding just over 1%.  The market opened this morning where it left off yesterday and when the dust settled at the closing, all of the major market indices were down well over 2%.  A 3-4% loss in just two days will get most everyone's attention and rightfully so.  The S&P blew through a few significant technical support levels and if they are not reclaimed soon (in the next couple of days) then there is a high probability of greater selling in the coming days and weeks.  The Fed really did not say anything that was unexpected but the market was ready for a pullback/correction and absent any new positive release by the Fed, investors were more than happy to sell and capture what gains they have for the year. 

WHERE WE ARE HEADED 

The summer months are notorious for their difficulty and choppiness.   With many on vacation, volume dries up and significant moves can be made with fewer and fewer buyers and sellers.  On the S&P 1600 is a significant psychological level that was breached today.  Additionally, the 50 day moving average was lost early in the trading day.  With the market weakening throughout the day, there was little positives to take from today's action.  There will likely be a bounce tomorrow morning but what happens into the close tomorrow will be more important.  To regain some semblance of an edge, the bulls will need to recapture 1600 and the 50 day moving average in the 1605-1610 range.  Absent a stand here by the bulls, the market looks to be headed lower. 

HOW WE ARE DOING

With the weakness over the last few weeks, we have been diligent to abide by our selling disciplines.  Accordingly, we have liquidated many of our positions and are now mostly market neutral (our Fidelity and TD Ameritrade portfolio's actually made money yesterday).   We will continue to watch our remaining positions to determine the best course.  If the sell-off continues, we will continue to pare our holdings but if the market bottoms and turns back up, we will quickly evaluate adding new positions to capture the gains.  

Earlier this week, Kelly and I celebrated 25 years of marriage.  If you consider our dating we have been together nearly 30 years and we are more in love today than ever before.  As we get closer and closer to emptying the nest here at home, we get more and more excited of what the next chapter in our lives holds.  Don't get me wrong, we will miss our kids but we will also be excited to have the time and flexibility to ourselves. 

We hope you are having a good summer to this point and that you have found time to be with those you love most.  Be safe in your travels and let us know if there is anything we can do to help you with your financial planning and investment needs. 

  Sam and Bo

We continue to make posts to our blog throughout the week so check it regularly if you want to see our thoughts.  You can access it by following the link below. 

THE GREATEST COMPLIMENT

In these uncertain times, a trusted financial adviser is more important than ever.  Whatever comes over the upcoming months and quarters, the markets are certain to have lots of volatility and wild swings.  Europe, the US economy and dysfunction in Washington, and continued trouble in Iran and the Middle East to name just a few.  If you have family, friends and neighbors that may benefit from our services, would you please forward this email and/or provide our contact information to them.  We purposefully do not spend time marketing our services so that we can devote all of our resources to managing your assets.  Thank you to all who have provided us referrals - it truly is the greatest compliment you can give us.      

Remember to visit our blog for market comments and observations in between newsletters.  We try to provide a few comments in between newsletters and certainly when there is a particularly interesting market day.  You can access it by clicking here. 

Published by Sam C. Bills, Jr.  Copyright � 2008 Bills Asset Management.  All rights reserved.

BAM Market Wrap is produced and distributed regularly via email by Sam C. Bills, Jr. of Bills Asset Management  3001 Flagstone Drive, Franklin, TN 37069 Phone (615) 371-5928 Fax (615) 250-4903 - www.Billsasset.com

Bills Asset Management  is an independent registered investment advisor (RIA) not associated with any financial institution.  Data used in this publication is gathered from reliable sources, although completeness and accuracy cannot be guaranteed.  Performance results do not take into account any tax consequences and are not predictive of future results.  This publication does not give any specific investment advice, does not provide financial planning services, or consider any individual's financial situation, needs or goals.  This publication may not be reproduced or retransmitted in whole or in part without the consent of the author, Sam C. Bills, Jr.

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