The bulls remained in charge in early April, albeit losing some of their steam by mid April.

Ironically, most economic indicators continued to depict a declining economy along with escalating inflation.

In addition, crude oil prices that rose to above $100 a barrel in March remained above that benchmark throughout April. Nevertheless, stock market investors in mid May cast caution to the wind and as such, continued to bid up stocks until mid May.

Against this backdrop, the news disseminated throughout the second quarter of 2008 in reference to the housing sector disclosed no let-up in the decline of housing prices throughout the U.S. , and the brutal increase of home foreclosures everywhere.

I guess the bulls got weary in mid May, giving the bears the upper-hand, driving most major stock market indexes down

by mid June to the lowest levels since the March 2008 sell-off.

You would think that the bulls would have gotten the upper-hand after April 30th, when the Federal Reserve (Fed) lowered short-term interest rates the seventh time in a row since September 2007.

Usually, after the Fed lowers short-term interest rates the stock market tends to go up, but this time it set the stage for a major stock market decline.

By the end of June most major stock market indexes were solidly in "bear market territory" (declining more than 20% from their recent peak set in October 2007).

The Fed on June 25th, near the end of the second quarter, finally left short-term interest rates unchanged.

In their statement they were more "hawkish" about the rise of inflationary pressures

building up in the U.S. economy.

Crude oil continued its ascent throughout April and May, eclipsing $140 a barrel as June came to an end.

The U.S. congress, trying to find a scapegoat for the political football that gasoline prices are averaging over $4 a gallon, blamed the oil speculators.

I remain particularly cautious about the stock market at this time and remain committed to ETFs that track oil, gold, and higher interest rates as the underlying theme of the potential for returns.

It is unlikely that any broad based stock market rally will gain any traction in the near future, as the U.S. and global economies continue to experience escalating inflation along with economic contraction.

Perhaps at best we might experience a "decade of economic malaise" ahead.