Zou Bisou Bisou

by Jay Pestrichelli on March 27th, 2012

For those Mad Men fanatics out there, you probably know what that title means. In Sunday night’s awaited season premiere of Mad Men, Megan puts on an unbelievable performance for her husband, Don Draper at his surprise 40th birthday party. She sings the 1960 French song “Zou Bisou Bisou” and wow, does she shock the partygoers. If you’re interested in seeing a video of the performance, click here.

Roughly translated the title itself means “the sweet kiss”, and it feels a little like yesterday’s market…except the kiss came from Fed Chairman Bernanke. (did I just ruin it for you?) In typical Wall Street fashion where bad news is good news, his comments about the positive trends in unemployment being out of synch with the economic data somehow sent the market higher. His words indicated that while the last 3 months have shown positive traction in the unemployment data, he’d like to wait and see if it's for real.

Perhaps it was the inference that the Fed will continue to support its stated position of accommodation and that inferred QE3 was back on the table. This would fly in the face of the market trend last week that sent interest rates higher and the 10-year selling off. But alas, it seems there is nothing that can get in the way of equities these days.

The anticipation of a weaker dollar from a suspected round of quantitative easing is most likely the underlying driver of today’s rally, and this was reflected in the Euro’s performance.

But whatever the reason of the day is, don’t fall in love with this market.  While we believe in the bullish story of 2012, it doesn’t cause us to forget our commitment to Buy and Hedge Rule #1 and Hedge Every Investment. Hedging when it seems like a waste of money is usually the exact time when you should do it. Remember, it’s too late to buy insurance when the house is already on fire.

So enjoy “The Sweet Kiss” but always stay prepared for the heart ache.

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