This market is antsy, and you shouldn't be surprised. In our January 29 article, I pointed out examples of stocks with big gains for the week, and advised that I thought the market was ripe for a bout of profit taking at the very least, beginning on Monday, February 1.

Let's see what's been happening:

It's instructive to view this performance against the changes in the two major indices. The Dow Industrials are up 632 points, and the Nasdaq is down 110 points. This churning action indicates a much more selective market, and you must be very sure you have done enough research before you take action in either direction.

We recently wrote that a 10,000 Dow is quite a psychological barrier, and it has proved quite true. We have gone through it intra-day, but never closing above it. Friday's close was particularly weak; after being up 88 points to 10085, the Dow closed at 9903 down 94 points. Today, the averages weren't down so much - the Dow was down 13 and the Nasdaq was down 25, but the majority of declining issues over advancers was unsettling. Those ratios were 17 to 11 on the Dow, and 23 to 16 on the Nasdaq.

There is a basic shift in sentiment going on. People don't come up and want to talk about Cisco, Intel, Microsoft, and Dell anymore, except to ask what's happening, in the sense that "why is there weakness?" More and more I see strength in oils and oil drillers, and people want to talk about heavy equipment manufacturers. This is a good time to avoid new commitments, and accumulate cash. My crystal ball is murky, so when in doubt, sit tight. Stay tuned.

The Market Pro - March 22, 1999