The sabbatical is over! We are back and we hope we can help unravel the maze of market gibberish and help make sense of it.

The markets have trudged higher for the last five weeks. The bull market, while still not loved, is alive and well. To our consternation we might add.

The week ended happily perched in record territory and all is still right with the World. Oil spiked based on the events in Iraq and we are firmly in the camp that this spike will be short-lived. Supplies from Iraq, while important to some developing countries and China, aren’t significant long-term to adversely affect the global supply chain. Just as the situation in the Ukraine put a scare into the EU, long-term, supplies will be adjusted and Russians position will weaken.

Most of the price escalation in oil is based on speculation and that usually accounts for about to 10% of the spike, which if you calculate it, is almost all of the upside move. Oil should increase in price for a short period of time and then come back to a more realist price point.

Longer-term increase in energy prices could do what an expanding economy still hasn’t been able to do. Increase inflation.

Speaking of inflation, where is it? Food prices have been climbing for 18 months, energy prices have increased over that same period of time and yet in 18 months inflation has barely nudged up 1.9%. Why has there been no inflation reported? We seriously think that there is something not right and we will look into it over the next few weeks to see what is going on.

This week we can look for housing data and Dow 17,000. One is very important, the other, not so much.

We expect housing numbers to come in a little better than expected. The weather has been very good; consumer confidence is a little better. Most analysts are looking for a sluggish housing sector for the next 6 months. We are not in that camp.

Dow 17,000 will be a talking point but the reality is it doesn’t mean much. We should see it this week but it won’t be the breakthrough that some talking heads are looking for. Record highs hold more significance and that’s about all we have seen this year. We will continue the upward trend but it will be slow and will have moments where it will just stall. We will wait for the earnings season to begin again before we will make any sort of major commitment.