So, THIS is what selling feels like!

Once again, you can sense the fear and smell the nervousness in the markets right now. All in time to greet me just as I was declaring myself officially (and cautiously) bullish for the short-term! Classic! What amplifies the sense of foreboding is that we probably have not felt selling like this since the days of the bear market. We are also getting clobbered while the news feeds are generally benign. No matter. The market is in a dour mood, and FINALLY selling has been the winning strategy, especially in technology. And for those of you who laughed as tech churned and agitated for the past 5-6 weeks, you now see the signs that the tech market was merely the leading indicator for where the market was heading eventually. The tech stocks led the way up out of the bear market, and it looks like they will lead the way down (where, we can't guess just yet). The percentage moves may be bigger, but they are "directionally correct."

If you ever doubted the market can be mercurial, capricious, and downright confused, one need look no further than the growing list of stocks that have made roundtrips. These are stocks that have returned to prices that either pre-date their last pieces of really good news and/or pre-date the beginning of the year. These are stocks that zoomed up with monster gains within the first two weeks of January, topped out shortly after earnings were released, and have not been the same since. I will submit to you that if this economy has any more legs at all, these will be the same stocks to keep close tabs on going into the NEXT earnings season (only a month away again!).

The selling has been so brutal (on a relative basis) that one must assume that some very bad earnings news must be around the corner and another recession shortly thereafter. This view is extreme as all indicators continue to suggest the big props of 2002-2003 should keep us afloat until at least the time of the Presidential elections. All bets are off after that, and I feel sorry for the poor slob that inherits this economy in 2005.

I have no particular new advice at this point, but I will submit to you that 2004 has proven why it is probably a little late for investors to be chasing this rally. If we get some sort of serious correction (yes - this has plenty of room to get worse!), then it might make sense for the less conservative of you to take a few swings. But you probably will not be able to treat these holdings as long-term investments (perhaps excluding mutual funds - free from scandal of course). I have claimed before that we should expect the market to trade in a range for the rest of the decade. While I kept getting the top wrong until I finally gave up late last year, the market may FINALLY be showing us its true colors. Stay tuned!