I told you I didn't like this market. Today was tough, with the Dow being up over 60 at one time, before finishing down 13. And declining issues outnumbered advancing issues by 16 to 13. The Nasdaq finished up only 4, with declining issues beating decliners by 24 to 17. This is a sign of a tired market.

Maybe worse yet, the Dow Utilities were down a whopping 6.14, as the 30 year Treasury Bond was down around 1 8/32, with the yield up to 5.16%. Sure, who wants to hold this stuff when you can get rich buying stocks? Well, investors will go running back to this stuff when the market takes its inevitable dose of gas one of these days. I realize our country is doing very well, but these valuations have gotten too far ahead of earnings levels.

The best reason for stocks to be going up, is that they have been going up. When stocks are expensive, people can't get enough. And when stocks are cheap, people don't want any part of them. The analysts are in a special basket case world of their own. When the stocks go up, they all know why and they're all optimistic. Conversely, when stocks go down, pessimism rules the day.

I advise remaining cautious and accumulate cash. And be patient. Stay tuned.

The Market Pro - February 1, 1999