Investors have always had very short memories. They forget that the Dow Jones Industrials plunged 13.6% last year in the spring, but the Dow is currently only down a little over 6% below its April 29th peak.

At FOXHALL we are trend followers and as trend followers we also track shorter cycles within the overall stock market.

The parallels to last year’s 2010's market correction are instructive. Last year the Dow peaked on April 26. This year it topped on April 29. Last year's correction was set in motion by fears of a double-dip recession, bad news about jobs and a debt crisis in Europe. The recent sell-off has all the same crisis—nothing has changed.

The only difference so far is that last year’s correction of -13.6% (the Dow's only 10% plus correction since the bull market began 27 months ago) and this year’s correction is a small -6.6% drop as of today, June 15, 2011.

The general consensus among analysts is that there WILL NOT be a double dip recession in the United States because almost every indicator is showing the U.S. economy is growing—just very slowly.

A number of analysts also believe that theoretically a -10% correction is possible, but the vast majority of analysts believe it is unlikely the current stock market correction will descend into a bear market, or a 20% drop, or even approach the severity of last spring's decline of -13.6%.

Long-term bull markets rarely hit a peak and then crash 25 days later. Historically, bull market tops generally develop over months.

Investors should put this current correction into perspective. There have been seven other drops of 5% or more in the past 27 months without the world coming to an end. It helps to remember that when we are going through what I believe will be a normal summer correction.

It also helps to remember that most economic analysts see an economic recovery in the second half of the year and a good stock market run in the last two quarters of this year.

In the end, investors value companies based on their revenue and earnings. The stock market price reflects the revenues and earnings of companies and DOES NOT represent the U.S. economy. Over 50% of the revenues and profits of S&P 500 companies come from overseas, mainly Asia and other emerging markets. Most major companies are still beating earnings and profit estimates and that is the best sign of all for a long-term rising stock market.

Currently, most analysts see this summer’s problems with Japan’s recovery from the earthquake, tsunami and nuclear crisis, the European financial crisis, politicians “playing chicken” with the debt ceiling vote and the end of the Fed’s stimulus programs as short-term transitory problems that will be solved one way or another by the fall.

If I could offer any advice, I would suggest that you eat, drink and enjoy the summer and spend some time with your family, because the stock market is most likely going to drift side-ways during these “summer doldrums.” You can’t get too depressed over this. Even stock markets need a vacation after a big run-up!

But I believe we will see a strong stock market rise this fall. And don’t forget, (as if you could!) next year is a presidential election year, which has historically been very good for the stock market. The Lord can only imagine what those politicians will do to pump up their chances of winning—but whatever it is, it will likely be good for the stock market.

It is 2013 that I worry about—but that is another GLOBAL OUTLOOK!

Until the next time…….

Patience!

—Paul Dietrich

dietrich@foxhallcapital.com

Disclosures: The opinions and portfolio information provided in the Foxhall Global Outlook are subject to change at any time, and are not to be construed as advice for any individual nor as an offer or solicitation of an offer for purchase or sale of any security. Client accounts may differ from model allocations due to many reasons. All investment strategies offer the potential for loss as well as gain. Individuals should consult with their financial professional to determine an investment strategy appropriate for their objectives, risk level, and time horizon prior to investing. Past performance is not a guarantee of future performance.

Foxhall Capital Management, Inc. is a registered investment adviser with the U.S. Securities and Ex-change Commission (SEC) under the Investment Advisers Act of 1940. The firm is defined as the Foxhall Capital Global ETF, 401(k) and Stock Series divisions, which manage a variety of ETF, 401(k) and Stock strategies in bundled fee and non-bundled fee ac-counts for primarily U.S. clients. The firm was redefined as of 12/1/08 due to the creation of the 401(k) Series division. A complete list and description of all firm composites and their com-pliant presentations are available upon request.

Foxhall Capital Management, Inc. claims compliance with the Global Investment Performance Standards (GIPS®). Foxhall Capital Management has been GIPS verified for the periods 12/31/99 – 12/31/08 by Beacon Verification Services. The ETF Series composites have received a performance examination for the period since inception through December 31, 2008. A copy of the verification report is available upon request.