Markets and EconomyYAWN.....BORING WEEK

Markets & Economy

Not much of a week but the Market is the same. Unemployment is what everyone will watch, along with Bush popularity.

The only number that counts when it comes to the economy is Unemployment. My Wednesday post regarding what Sandy Weill thinks was only what he thinks. Unemployment is everything. Stay sane. Get out on your rules. Market looks strong but if Bush continues to weaken, watch out.

Bad Tuesday/Wednesday/Thursday due mostly to options expiration. Options expired Friday. The lack of volume on those down days had to tell you BUY or stay the course. Friday up volume was not very good either and may have had more to do with options "roll over" than actual new buying. Also understand that put option buyers lost their asses over the past two months so be alert to the put/call ratio. I think most of the put action Friday was deep out of the money, people protecting against a crash. Guys I know in Chicago are telling me that covered call writing is coming back in style but people no longer do a shit load as they did in the 90's.

The market in general seems to have been favorable to the high risk speculators in the tech area, but a closer look will tell you that the speculation was on PROFITABLE companies. Here's some staggering stats: EBAY has given 100% in a year; Yahoo has tripled; United Online (who's ever heard of them) went from 10 to 27 in one quarter; FindWhat has gone from 5 to 21; DoubleClick from 5 to 10; and three Chinese??? portals are up from under a dollar to $25 plus.

All these companies and more are PROFITABLE, a huge change from the speculation in the late 90's. Add to that the fundamentals, which are critical now. Internet users will rise from 141.3 million in 2001 to 218.6 million by 2007 and Americans are switching to expensive broadband by a rate of 50% over a year ago. I'd say tech is no longer undervalued. You better own stocks with PROFITABLE companies. And to sound like a broken record, buy stocks that pay dividends. Get out on rules not news or emotions. Market still looks like a Bull-----BUT. As a tech observation, foreign tech is getting killed by the cheap dollar.

Mortgage rates rose for the third straight week. They are now more than 5%, and lots of "experts" say this is good news. The M&A activity is good for markets even if you are not involved. If institutional investor percentage is not a part of your buy in strategy, you might want to rethink. Be aware of Mutual Fund participation in the stocks you own and be sure when you buy with at least 10 Mutual Funds participating as a criteria, you sell on technicals because when they sell you absolutely have to get out. The Mutual Fund business is coming under increasing scrutiny by regulators because of their hidden fees and lots of investors may begin to shun them because of their miserable performance. Watch this participation figure like a hawk; Investors Business Daily is the only paper that reveals these critical numbers.

The other thing you have to know is that there is still three TRILLION investor dollars on the sidelines. This is dumb money, scared money, or what is called "case money" (meaning it's in old granny's suitcase in the attic). This kind of money has a tendency to move all at once. When it comes back in you will make a score. THEN you will see a sell off because all the dopes waited far too long. And I say "dopes" because who has money in the bank at 1% but a dope or a coward.