This Indicator is name after a baron, the Baron of Schlitz, Georg
Heinrich von Gortz, one of the modern world's early central bankers
and the father of Sweden's copper coinage system.

On Mar. 22nd the FOMC(Federal Open Market Comittee) had released its
minutes in which the following statement was found...

'participants(fed members present) indicated that, in current
circumstances, they viewed an upside surprise to inflation as
potentially more harmful than an equivalent downside surprise, partly
because such an outcome could well impart additional upward momentum
to inflation expectations.'

To summize the backdrop of current environment in which this
statement was constructed especially with regards to energy prices
versus the environment we were in when i wrote a posting on Aug. 12th
2004 (Vol. 1, no. 4 Black Delta), energy(oil) prices have continued
its' upward momentum and from all indications it is not likely to
abate significantly(the $30-40 price levels/per barrel) anytime soon
(prices of crude oil futures contracts for future deliveries).
Moreover, such a concern(the statement above) was visibly absent from
the minutes a month earlier. Crude prices have retreated somewhat
from a high of $58.20 to the $51 dollar per barrel level. Hindsight,
a sustained $10/barrel will increase inflation in developed economies
by 1/2 point and reduce GDP growth by 1/4 point. Interestingly, Ned
(of Ned Davis) has shared the idea that oil wouldn't be a problem
until it hits $60.

PPI/Core PPI and CPI/core CPI for the month March will be released
this morning and tomorrow morning(Apr 20th). Any suprises or 'upside
surprises' as stated by the fed members could be an affirmation of
the risk of inflation. It is important to note that markets are an
efficient interpretor pricing equities now what they should be given
prevailing economic landscape conditions 6 months from now.

It is also important to note that, the Dow has breached an important
support level of 10,303 - 10,348 last week an is at the edge of the
10,043 support level.

Result: The Gortz Indicator is 'elevated' based on potential
inflation concerns. A few weeks ago, Senate voted resoundingly 67-33
to pressure Beijing to re-value/float its currency or risk the
enforcement of a 27.5% tariff on Chinese goods-imports. We could be
on a verge of a general economic slowdown that has its' underpinnings
in politics folks! and inflation of course...

Last but not least, on a slightly lighter note, Intel Corporation is
due to report its' earnings after the bell today and it will be most
interesting if not fascinating to see how the street digests its'
story. Intel is the world's largest chipmaker, microprocessors(i.e.
brains to your computer) and it recently raised revenue and profit
margins forecasts for its' first quarter. My friends behind the
scenes tell me that it has been favored by the street almost to a
point of noticeability(if you'll allow me) a concerted effort with
subtlety(if i may), in its'(i.e. big financial houses) efforts to
groom and build around it, the next story(It is strictly, and i
emphasize strictly, deductive observations that remain to be proven
and NOT to be used in any other way.)

May you be prosperous and successful in all your endeavors... and like
Alice always says and Otto undoubtedly concurs that in life, 'There's
more than just a little money you know...'


P. Mavin