The bulls regained their upper-hand when 2006 began, raising all major stock market indexes from their free-fall that began in December and continued until the end of 2005.

The logical catalyst for the bullishness of stock market investors in early 2006, is hard to find.

Of course, you would never think that the U.S. economy was in any trouble if you listened to the “spin doctors” on the media representing the views of Wall Street and the U.S. Government.

Wall Street pundits however, always tout their wares (stocks) whether stock prices are in the ether or in the basement.

When stock prices are high, they are always going higher, when they are low, it is a buying opportunity.

But remember back in early 2000 when most Wall Street pundits were overly optimistic

on stocks. They professed there was a new paradigm for stocks at that time and stock prices could only go up. They were however proven wrong as the brutal bear market took hold in March of 2000. Most investors are still reeling from their losses.

Many of the fundamentals for the U.S. economy in early 2006 remained at best very fragile, and at worst, could mean that a severe recession is ahead.

The Federal Reserve (Fed) is continuing its campaign against rising inflation in the U.S. economy by raising short-term interest rates at every regular scheduled meeting since June of 2004.

Long-term interest rates have also been inching up in early 2006. Mortgage interest rates have followed long-term interest rates higher recently, raising thirty-year fixed rate mortgages to levels not seen since late 2003. As a result of higher mortgage interest rates

the “frothy” real estate market in the U.S. has been cooling recently.

Crude oil prices are nearing the record high price of $70 barrel set after hurricane Katrina. The peak driving season however, is not here yet.

The U.S. Government continues to bleed “red” ink”, as one spending bill after another gets approved by congress and the White House.

The war in Iraq continues with no end in sight, gobbling up 2 billion dollars a week, and wreaking havoc to the lives of U.S. soldiers and the Iraqi population (how sad).

I remain bullish on oil, commodities, and precious metals. I remain committed to these specific sectors for the assets that I manage for my clients to hedge the continuing economic and geo-political uncertainty ahead for the U.S. and global economies.