Stock Market

The market has drifted down into deep oversold territory that can
as easily signal further vulnerability as a rally prelude. If investor
despair is creeping in and taking hold, the broad market can easily
drop another 8 - 10% in relatively short order. As I have discussed
in recent weeks, it is hard for fund managers to hold on for recovery
when current profitability is so very low and when a significant
rebound of earnings seems very "iffy" after plenty of disappointment
since late 2007.

At the current level of 682, the SP 500 has moved down from quite
reasonable to cheap. In my view, it is interesting from an investment
perspective for the first time in a long time. In fact, I have only traded
equities for many years and even cut back on that when the market
had its bubble over 1996 - 2002. Now since I am closing in on 70
age wise, I am not really interested in long term positions, but I do
plan to extend my time horizons well past the 2 - 4 month regime I
have followed for so long as we move forward.

For the very short run, we can only see whether there is enough of
an oversold to trigger more than a few days sucker rally or whether
fear is up enough to trigger another round of heavy selling.