Markets and Economy for the Small InvestorVOLUME UBER ALLES

To most of us, volume is one of THE necessary criteria for investing. Volume has been a concern for quite a while now. It is always down a little during the ten days before Thanksgiving, and off big time during Thanksgiving week. As I've been stating repeatedly over the past couple of weeks, the combo of protectionism, the unending scandals in the investment field, plus the collapse of the dollar is now hurting big time. Foreigners are especially hurt by all this and are pulling out of a market that guarantees they will lose due to the currency risk; this risk added on to the criminal nature of the banks, brokers, and institutions is not designed to make an investor feel confident. This atmosphere is made much worse by the inexcusable "virtual pardon" given to Putnam by the SEC. Those guys belong in jail. Instead we see the "old boy network" at the SEC is still in charge. Were it not for Elliot Spitzer, the AG of New York, this criminality would continue unabated..

Most in the financial community who are honest are in despair. Most of us blame George W. Bush. And, as I said yesterday, if there was anyone else to vote for that person would probably win, or at least assure the victory for the Democrats. These tariffs are particularly bad. The Republicans caused the Great Depression with high tariffs (Smoot Hawley) and they are on the same path now. Trade wars are just that: wars. People will get back at you and once the process starts it is all over. I cannot tell you how bad all this "protectionism" is for markets..

All calls for a 10,000 Dow by Christmas are out the window. The Indexes do NOT look strong due to the volume collapse. This is now NOT a market for new investment based on the overall market being strong. This is a HOLD market so long as your individual stocks look good and are performing well. All the indicators are still strong; jobs are getting better and the Fed is withdrawing liquidity from the market, meaning real rates will rise over the next few weeks.

I always look at market numbers, and only market numbers. One of the key numbers is volume and I don't like what I see. The stock market is almost, ALMOST, always ahead of the game; it said the economy was getting better long before many of the numbers said so. This market will tell you, and may be telling you right now, that things are not all that good. Bush will have to back off the tariffs, or else. IBD has a major story in Monday's edition. I cannot understand what is happening, as I speculated yesterday: maybe Bush IS a moron.

Again, this financial opinion is aimed at the small investor, those of you with less than $50K in the markets. Especially those of you with $25K and less. Your purpose is to build AND to PRESERVE CAPITAL. Don't get drunk on stories. Stick with numbers.