As I reviewed the action today impressed with the Dow's resilience, I realized that my last missive was not clear about where I was observing the weakness in the market. Obviously, there is *some* strength. But two of the weakest areas right now are technology and retail. Technology is experiencing the nasty sell-down you would expect in such a highly over-valued, over-hyped, and very speculative universe. Retailers are getting killed because there has been some real bad news dropping that has people panicking that the consumer is finally biting the dust (I always find it amazing that people are quick to conclude that a bit of saving and a bit of consumer restraint is such a baaad thing!) It just so happens that I have been observing these two sectors a lot in the past few months, so my perspective on the overall markets has been prone to getting skewed. However, it HAS given me clear warning signals that I cannot ignore. The undertones to this market are slowly becoming undertows that threaten to take down the ship. I have earlier offered my opinions on what has motivated some of this vigorous selling and the potential paths from here: up or down. I thought that by now the sellers would have exhausted their ammo, but apparently there are a LOT more profits that need protecting than I thought!

Anyway, as expected, world markets that trade after the US goes to sleep all sold off in reaction to our failed Saddam rally. Yet, they will be yanked around as they wake up to find out that the US did not continue the sell-off. They will then rush to buy back what they sold just on Tuesday. And here-in lies some of the problem with our rally. There is no real thesis giving the market an excuse to go up cleanly here. Whereas things were so bad earlier, they had to get better, we are now in a "sour" spot where stocks have well-priced in a recovery, and then some, and the future is not bright enough to justify going ever higher in any convincing fashion. So, we get a steady creep up in some areas (witness the stocks of the Dow), and vicious sell-offs in others (like technology). I suspect that if the markets can just hang on through the end of the year, the areas of the market that are getting slammed now will recover rather quickly in January as people build hope again. It should be interesting either way. But whatever unfolds, the race to the finish will be close. Bush needs the market to stay strong well into the election cycle to offer him the best hopes of political survival. So while this rally should not go on much longer than say the Spring, I suspect we will all could be surprised at what additional stimulus the Feds may have up their collective sleeve to keep the patient alive just a little while longer.

And on that note, I am announcing that this will be my final push. I will no longer be whipping off these missives to you (oh come on, don't cry now, everything will be alright). You all have been great in humoring me and subjecting yourselves to my whining, pining, and fantasizing about the markets. It has been three years I have been at this, and I think I have FINALLY gotten the catharsis that I needed out of it! A lot of you are at best passive investors, much less traders, so my constant gyrations with the mini, the medium, and the macro-shifts in the markets probably can get a bit disorienting. Plus, I have noticed that there are a LOT of outlets now for the kinds of opinions that I have. I started this in the hopes that I could offer an alternative to the dribble and misguided rose-colored optimism I kept reading in the mass media as the bear market gained momentum. But now the power of the Internet brings you all sorts of alternative voices, and some very good ones I might add! So, I will keep posting missives on my website as the spirit moves me, and hopefully one day I will find the time and motivation to turn it into something a bit snazzier. But in the meantime, if you ever want to check out my wacky commentary, you can tune in to http://www.drduru.com/money/money.html.

It's been fun, and as always.....PLEASE BE CAREFUL OUT THERE!

Have a happy X-Mas and a Merry New Year!