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October 23, 2004

The Stock Market is Not Behaving Well!
by Douglas R. Gillespie

Are stocks doing well or less than well? For those watching carefully, the latter is the correct answer. A coming event is currently casting a shadow in advance of its arrival, and it remains my view that the event will be stocks doing even less well -- as in much less well!

Three recent missives, all posted on the GRA website, set the tone and lay the groundwork for what I believe is quickly approaching in the stock market. These are: "The Mother of All 2004 Failing Rallies?" (10/6), "Stocks: A Scary October?" (10/12), and "Stocks and the Coming Electoral Chaos" (10/13).

These titles should leave zero doubt regarding my current feelings about the equity market.

It is time to pull this recent work together with an update, which I plan on publishing sometime next week. In the meantime, though, I'll furnish a quick observation or two.

In recent days, I've received e-mails questioning why stocks are behaving so well in the face of some serious and growing adversity. This gets to the heart of the first paragraph, as well as to the material to be examined in next week's update.

Simply stated, the stock market is not -- repeat, "is not" behaving well! Moreover, I believe it is fair to assert this in both relative and absolute terms.

To be sure, this is not the message coming from Tout TV and the other venues in the regular propaganda loop. In turn, the barrage of perpetual bullishness coming from these sources merely serves to raise by significant amounts the frustration level of the folks who are watching what is really going on in the market just below the surface.

So here is my admonishment of the day, to wit: preferably, turn Tout TV off -- completely! However, if this cold-turkey approach risks serious withdrawal symptoms, at least turn the sound off -- completely

Douglas R. Gillespie, Sr.
Gillespie Research Associates
165 Sheridan Avenue
HO-HO-KUS, NJ 07423
201-447-5743

Doug Gillespie oversees his own financial-market and economic consulting firm, Gillespie Research Associates. For a complimentary sample of Dougs material, e-mail him at drgillespiesr@aol.com.

Copyright © 2004-2005 Gillespie Research Associates. All rights reserved.

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