So the NAPM number says that manufacturing is not contracting as much as was expected. Once again, an indication that manufacturing is not as bad as the CEOs keep telling everyone in their look ahead disclosures. Unemployment will be the next big number to watch for signs of further worsening of the economy. . . .or gradual improvement. The FED and the markets are both in limbo awaiting these crucial numbers which are our "best indication" as to what lies ahead for the U.S. economy. . . . or are they?
Loads of cash on the sidelines these days. What started out as a riot with everyone involved, has turned into a spectator sport. . . with only a few bulls and a few bears left battling to see which will dominate in the months ahead. Remember, the bulls were incredible winners 2 years ago. The bears had reciprocated with some amazing wins last year. But this next year is still up for grabs.
We could still flounder around in uncertainty for a few more quarters. . . and if so, there will certainly be more bankruptcies, downsizing and layoffs as TIME takes its toll on the weaker companies. Then again, we could pull out of this with barely a recession, should the earnings numbers coming out in the next 2 weeks be stronger than the warnings which led up to them.
And what about the FED? They add, then subtract liquidity. . .giving mixed signals as to which way things are headed. . . .as though they are trying to hide their hand in a poker game. And liquidity is a MAJOR indicator on what lies ahead for the markets. As they increase liquidity, the markets and the economy heat up. . . they can't help but heat up, due to the large injections of cash.
One thing is for certain, the year ahead between April 1 of 2001 and April 1 of 2002 will require new dynamics in both investing and in trading. The coming market will differ from both the market the bulls enjoyed in '99 and the one in which the bears enjoyed in '00. Stock picking will be more difficult, scams will proliferate and hopefully, the entire market will "settle down" some.
We could really use a period with less volatility for a while overall. Seeing stocks like KTEL, MPPP, Caterpiller and John Deere become momo plays was more than I could bear. [no pun intended]. . . . And likewise, seeing Yahoo, Cisco, Lucent and Nortel gradually become penny stocks is a lot of bull. [intended that time]. . .>g<
But the Individual Investor became WAY too powerful during that last bull run. And therefore they MUST first be put in their place before the markets are "allowed" to continue their journey. HMMmmm. . . . There just may be more insight in that simple statement than in all the economic indicators. . . as we slowly learn to what extent these markets are "driven", as opposed to "trading freely".
Best wishes all. . .
Rande Is |
