Where Are The Stocks Going Today?

However, history shows that the economy and the stock market will recover. George Santagano, the Spanish born American philosopher (1863-1952) said "those who do not learn from history are doomed to repeat it."

History shows that America does it best when our feet are put to the fire. Last week on CNBC, four supposed gurus were all bearish. The emcee declared, "Wow, everybody is bearish" as if she was surprised. Now who do you suppose selected the panel? The media is doing a terrible job of fanning the fires of fear. To confuse investors more Senator Dodd said the Obama Administration may have to take over the banks but Barney Frank rejected that idea.

We need more leadership from President Obama and we saw some hope last week as his administration said a privately held banking system is the way to go. However, it may find itself taking a step in that direction if it converts the government's preferred shares into common stock as some speculate. Also, the president said the treasury department will begin ordering employees to cut taxes from workers paychecks by April 1.

Also positive, the leading economic indicator index increased for a second consecutive month and the Fed said we will begin to see economic improvement by year end. We wonder if any of those big bearish gurus are listening. No one knows what the Treasury department's plan for toxic bank assets will be or how well the stimulus program will perform. But history shows that hope for the future and interest in stocks will return. George Santagano would draw on the history of America to agree with our opinion.

Today - market action the last hour Friday was encouraging. We believe the technical market indicators are ready to support a rally and the sidelined cash is at record levels. Classically, the market gets better when the mood is the worst.

Author
Alfred E. Goldman, Chief Market Strategist at Wachovia Securities, has been in the business since 1960 as a securities and market analyst, writer, and lecturer on investments. A weekly market report, which discusses his outlook for financial markets as well as the economy, is available for clients and is currently published in approximately 40 newspapers.

Reprinted from Wachovia Securities