Zeev's Turnips Patch-No Politics (ZEEV)

[mlsoft]

sarai--

Yes, today's beige book was almost certainly a contributor to the demise of the rally. Nothing much for the bulls to chew on there, contrary to hopes. That is why I see a three pronged attack on the bulls coming up, with bad economic news, an active and negative warnings season, and the approaching showdown with Iraq combining to take us to new lows.

We might get a rally the first week or so of October between warnings season and the actual earnings reports, but the current earnings estimates for Q4 are still much too high, and lowered guidance during earnings season will likely bring on a new leg of selling. The only thing that could prevent that would be companies holding back on guiding lower to wait and see if late holiday sales will come in to save the quarter, but personally, I look for a slow holiday season that will not bring the street much cheer.

Good luck to you.

mlsoft