ANALYSIS: Overall Market, Commodities, Bird Flu

The market has been doing pretty badly lately. There is a strong sense that the market is oversold, having dropped so many points in the last week or so, yet even still the market finished down for another day. The market shouldl rebound in the next couple of days, but I don't think it will last very long. The concerns that I mentioned in my last post are still lingering, and it appears more and more likely that the Fed will raise interest rates yet again.

Commodities have followed (or maybe lead?) the drop in the market. Steel, silver, copper, aluminum, and many other commodities have all seen huge drops in the last week. It seems that many on Wall Street (from what I've read and heard) believe that this is just a healthy correction in their meteoric rise this year, and have made predictions that it will continue to rise later (maybe after summer). However, I'm going to stay out of it for now. The drops have scared me a bit, and some think that they have reached a top. It is generally believed that the time around the beginning of Summer is always a bad time for the market. People go on vacation, taking their trades (volume) and their money (selling) along with them. Because of this, I am going to stay out of them for awhile until more data is available.

Consider taking a look at life insurance, which continues to do really well. The Entertainment - Diversified industry also continues to do well. This industry includes companies such as Disney, Time Warner, and Vivendi. DIS, V, and NWS are all showing relative strength.

One last thing, bird flu-related stocks may be a good play. It's been a hot topic for some time now, and it has gotten worse now that some scientists are worried that the virus has evolved into a new strain that can be transmitted from human to human (dang, that's pretty scary). Cases are also being investigated in Indonesia. Also, there are some reports that Australia is not well equipped to handle a bird flu outbreak. MedImmune (MEDI) is one company that has signed a contract with the US Government to produce an inhaled vaccine.