I have been twisting and turning in my head how to alert those of you interested that another big bullish move may be at hand without getting overly excited about the prospects. The overall market continues to churn away, but underneath the covers I see a lot of exciting moves upward in individual stocks. Dampening my enthusiasm is that so many of the stocks I follow have made these great moves right near their 52-week highs. Thus, either a good "next leg" up is about to begin, or we have formed a major top here.

Anyway, as I struggled to find words to describe what's going on in a balanced way, I chanced upon this article which somewhat debunks the theory that the dog days of summer feature no action of importance. It speaks to what I think I am seeing here. I attach it below for those of you inclined to read a bit about the technicals (and history) in the market.

I am sticking to my expectation of a Fall correction. Another leg up in the rally would further reinforce the complacency which will set-up any such correction. But to be clear, I do not think this correction will be a major one (for example, we will not revisit the lows of March), it will not be the last or largest correction of what I still consider a bear market, and it will be an excellent short to intermediate-term buying opportunity. (A good, dear friend of mine declared the bear is dead - I refuse to accept that declaration until we can get through an entire year, like 2004, without major bearish activity in the markets and/or economy). If you choose to hold on during the madness, you will probably come out OK in due time as well, but I continue to recommend taking some profits ahead of any such potential calamity as an appropriate deference to risk management and as a way to build up some cash for grabbing lower prices.

{The following article is from Barron's}

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Wednesday, August 27, 2003

GETTING TECHNICAL |

By MICHAEL KAHN

August Fireworks? History Says Yes 

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