New Column up at Real Money (9/28/04)


The latest column is up:

“Bounce Beckons but Long-Term Challenges Remain”
In a postbubble, poststimulus economy, look for trading vs. investing opportunities.

For those of you without a subscription, its loosely based on Monday’s comments, Bull or Bear Market?

Here’s an excerpt:

“Two weeks ago, the S&P 500 and Dow Jones Industrial Average had reached the top of their trading ranges and I surmised that, at the very least, a retracement of the Aug. 13 to Sept. 15 rally was likely. Furthermore, I suggested any break of S&P 1123 would project a pullback toward 1100-1105.

These levels have been reached — the S&P traded as low as 1101.29 Tuesday morning — and the markets have become slightly oversold, at least on a short-term basis. That suggests to me that a small, relatively insignificant, bounce is due. After that, we should resume moving downward toward an intermediate-term low sometime in October.

As that progression unfolds, investors may wish to ponder this philosophical query: What is the meaning of the lower highs and lower lows of 2004? Are we in a bear market? Or, as some have argued, are we merely digesting outsized gains from 2003?

With the third quarter ending Thursday, and the indices flat to down for the year, one can hardly claim this is a powerful bull market. Yet the range-bound environment hardly proves the bear’s case.”

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