October Suprise...

The beginning of the final week of October brings us into the seasonally favorable time of the year. Market factors which had been against us are now in our favor. Generally if we haven’t had a wipe out by now we are relatively safe by historical standards. The market itself seems to be slowly building on its recent gains. Confidence is beginning to creep back into the equation. My feeling is the FED will gain confirm what many market watchers already know; that there is little or no sign of long term inflation . Large Caps and Growth stocks continue to take the lead from Small Caps and Value. Mind you it is still very much a stock pickers market with the advance /decline line, the new high/new low line and volatility index still seemingly uninspiring. My view is that the DOW Jones Industrials has broken out of the 6 year Bear and I am waiting for confirmation from the DOW Jones Transports which need to move somewhere over 5000. The DOW Utilities is already long gone with a break out and is pointing to lower long term interest rates.