The Week ahead

Another bad week ahead

The continued rush of investors out of the market is likely to take the market lower in the week ahead. It is very likely that 1997 lows will become widespread among publicly traded companies. Saying that, the worst of the selling may be over by weeks end.

We will start to see some statistics in early October with regards to consumer spending and confidence. General Motors patriotic 0% finance sale was a master stroke worthy of a smarter company. Anyone considering a vehicle with secure employment will probably rush to take advantage of that offer, now matched by Ford.

Bargain hunters may find their way into the market as many sellers realize how foolish they have been. I know a guy who was forced by his brokerage to sell some Dell stock on a margin call just before the bombing at $22 a share. He found some more money to meet the margin call and will happily be buying back at $15 a share on Monday. Talk about the fortuitous margin call.

Patriotism is not dead in this market. It merely took a step aside for fear. Fear will eventually work its way out of the market. Then there will be a steady trading range, followed by a shocking rise back to prominence. When I can not predict. That it will happen, that much is written in stone.

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Shmuel Protter
investmenttool.com