The stock market has been Greenspanked.

He spoke Tuesday, and the Dow fell 105. He spoke Wednesday, and the Dow fell 61. He finished speaking Thursday, and the Dow fell 195!!! Please Mr. Chairman, stop talking or you will bury us!

On Friday, the market came back from a pretty good deficit, with the Dow finishing up 4. But it was really a bad day, as the New York had only 1,103 advancing issues compared to 1,797 decliners, and there were only 33 new highs compared to 248 new lows! Today was deceivingly miserable. The Dow came back from a sizable deficit, to finish up 90. But while it was doing that, the declining issues out paced the advancers by more than 2 to 1, at 2,039 vs. 947. The Nasdaq also came back from a deficit to finish slightly up 2 points. but declining issues were almost twice gainers, at 2878 vs 1457. To add final insult to injury, today the New York had 25 new highs vs. 311 new lows!

Wow! What does this mean? It means we're getting our butts kicked, son. If you own small Cap's, you know what I mean. With this all-time record breaking market, and the Dow still over 9000 even with the recent Greenspanking, the Russell 2000, which is the premier small cap index as far as I'm concerned, was down over 5 points at 433. This is an over 1% drop today alone, leaving this index 2% negative for the year.

I'll tell you what else this means. This market is sick, and this market is dangerous. The big stocks are prospering but the little stocks are dying. It ain't healthy. It doesn't mean there isn't money to be made, because there is. But it does mean that you must be careful, meaning no buying on margin, and no chasing high flyers and paying someone else's profit. If you haven't noticed, the Internets have been taking some serious gas the last few days, so you don't want to join any party like that. Consider stocks like AT&T, which has been turning it's business around, has enormous assets, and a top-notch C.E.O. like C. Michael Armstrong. There is no substitute for good management, and if you have patience, they can make you a hell of a lot of money. Stay tuned.

The Market Pro - July 27, 1998