A Comment -- General Comments From an Expert (A Commentary)

S&P 500: He is treating this rally as nothing but a rally. Even the Fed is pointing out that the economic outlook is pretty bleak for the next year or so. That indicates a lot of misplaced confidence in the market.

Gold: He prefers gold stocks to bullion because you can attach some investment value. (See Top Picks.)

Crude Oil: Inventory report out of US indicates it continues to be very bullish, probably because 1) we are in the summer build-up driving season and 2) CATANGO, which means that 5 years out oil is actually priced more expensively than it is currently. Buyers storing it for a year. OPEC has maybe 6 to 7 million barrels a day in excess capacity that they can turn on. When it gets expensive enough they will start to relax rules and he expects it will come back a little. It may be time to take some oil stocks money off the table.

Natural gas: Sees it very vulnerable at this point in time. Storage is at very high levels, 72% in Canada. The only catalyst for any price increase will come in the heating season of October/November. Expecting a pullback.

Uranium: Starting about 2 years out, there is a huge demand for uranium, much more than the current supply can meet. Thinks it is going to get very expensive. You have one to two years before this is going to happen.

Inflation:-US has to physically print $1 bills because when everybody is trying to hoard cash, there are physically not enough $1 bills. Printing presses can be turned on for a certain amount of time without being inflationary. It depends on what the Fed does 2 years from now. There is no inflation currently because the money multiplier is spinning down so quickly.

GMAC bonds: If General Motors (GM-N) goes bankrupt, no one is quite sure what will happen with GMAC bonds.

Market Outlook: Thinks we are in a tactical rally that began in March and is likely get us through into the fall. If you can't be an active investor, you should use this rally over the next few months to reduce your equity weight as he thinks there will be more trouble to come in the fall or winter. If you are an active investor, take advantage of this rally but make sure you have an exit point.

Cdn$ looks constructive indicating there is a solid demand for commodities. He has hedged currency back to Canadian.

(A Top Pick May 5/08. % N/A.) Canadian banks. When Lehman's failed he liquidated his financial services. Since then, he has traded them. Not yet convinced that we have gone enough through the earnings cycle to say that the recession problems are fully recognized.

Telecom Sector: Becoming relatively positive on this sector. 1st quarter earnings have shown a shrinkage in cell phone usage. Heavy users have largely done their staff cuts so he doesn't see another big round of that. The business is a high margin one.

Gold: Thinks gold will trade in a band between $800 and $1000 this year.

Dow Jones is in a short-term uptick but the longer view shows it is still trending down. The Put to Call ratio has reached the same level as last May. Thinks the near-term bull is done.

Gold: Short term it could go anywhere but in the long-term it should trend higher because he expects inflation will be starting. He is guessing it will be anywhere between $900 and $1000 in the next 12 months.

(Market Call Minute.) US banks? If you have to buy them, you have to be focused on the ones that have staying power and growth such as M & T Bank (MTB-N), Wells Fargo (WFC-N) and US Bank Corp (?).