The market had a surprising rally today, with all indices up. Winners outnumbered losers on the Dow Industrials 1574 to 1387, but losers outnumbered winners on the Nasdaq 2337 to 1874. This indicates lots of churning, and not a very impressive up-move. Further, volume was relatively light on both major indices.

To its credit, the market overcame a Russian devaluation, and "Confessions of an Oval Office Tenant." The market may just have been temporarily exhausted on the downside, and did enjoy talk of a supposed $50 billion on the sidelines, waiting to come in. Compounding matters, the Fed is to make its August pronouncement tomorrow, and options expire this Friday. Perhaps the "truest" measure of overall market sentiment was the 30 year Treasury Bond which saw the yield rise slightly.

If all this sounds like we're talking out of both sides of our mouth - you're right! These are the kinds of economic/financial pronouncements that surely classifies both fields as "Arts", rather than "Sciences". That's why you guys and gals need me. The straight skinny is this - the market is dangerous as hell, and if you are thinking of investing as usual, you are at least semi-nuts. Today's action was an upward reflex action on the way down to lower levels.

Take if from yours truly. If you start stockpiling cash so you can hog-up great stocks at bargain prices, the odds are that you will be a lot happier the first of the year, than you would otherwise be. CASH IS KING! Stay tuned.

The Market Pro - August 17, 1998