In times like these,
I am reminded on an old adage about the market being wary of uncertainty.
And there is plenty of uncertainty to go around right now!
Presidential elections - Kerry and Bush neck and neck, no likely predictor of the outcome until November... and Don't be surprised if we have a repeat of the post November 2000 quagmire.
Oil Prices - technically in uncharted territory. We've just seen a breakout to a new high. Price could go higher, begin a new trading range or breakdown to lower levels.
Terrorist threats - we know "they" will do "something". The quest is what and when. Remember that "they" do understand the value of an attack days before an election (IE: SPAIN).
The economy - strengthening? or weakening? and can we even trust the numbers anymore?
Interest Rates - going up? or staying put so as not to strangle the strength in the economy too soon?
It's very difficult to predict a major rally with all these uncertainties. The markets are currently mired in a down trend, therefore I would tend to flow with the prevailing winds so to speak. I suspect any rallies will be short lived and followed by new lower lows as we have already seen several times this year.
IMHO, obviously the election will be resolved in early November (with a small chance of it being prolonged into December). I also suspect that with the passing of the election the terrorist threat level will stabilize to pre election levels.
Despite the weal jobs report, it does appear the economy is getting stronger and interest rates have been too low for too long (though they won't rise as far or as fast as some may think).
I'm still holding that before the election we will see lows of DJIA 9000, S&P500 955 and the NAZ at 1500. We may see a rally or two in that span and it is possible that those predictions may prove too high or too low, as always the market will decide.
Good Fortune to all,
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