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| Stocks: Enough Is Enough? - May. 18, 2004 |
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The major point I wish to make is a repeat of a view expressed on more than one occasion over the last few months. Which is that the stock market continues to act eerily similar to approximately the same period during 2002.
Will 2004 history replicate that of two years ago? I cannot say for sure, of course, but as long as current patterns remain intact, investors should take them seriously -- very seriously!
The market's current short-term oversold condition argues for a rally. And under these conditions, the "magic" (euphemism for "manipulation") usually associated with expirations does, too. The axis powers of Wall Street and LaSalle Street certainly would not mind seeing a strike price or two (or three!) disappear from a lot of put contracts. But ironically, a decent rally commencing now and from around current levels actually helps, not hurts, the prospects for paralleling the 2002 episode.
The geopolitical climate remains treacherous. Moreover, it is unlikely stocks can rally very much unless interest rates maintain some stability. But with at least a modicum of cooperation from both areas, the stock market just might catch a better bid over the next few to several days. Stay tuned! |
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