The shocker came on June 30, when the Fed not only raised interest rates by 1/4 point as expected, but also stated that they had returned to a "neutral bias". It was widely anticipated that their bias would be toward tightening, and when that didn't happen, they opened the corral gates and the bulls ran like hell. In fact they're still running. The Dow was down around 50 points when the announcement came, and the Dow proceeded to go up 155 points.

Not only that, but the Nasdaq and S&P 500 both hit new highs yesterday and today, with the Dow going up another 95 points today, to close at 11066. But that's the easy part, talking about history. What's tough is predicting what will happen. That's why librarians aren't rich, and why there are historians who will gladly tell you anything you want to know about the past, for the price of a bowl of chili.

With the Dow being up over 500 points this week, and the Nasdaq being up over 150 points also, I can't imagine these major indices going straight up from here. I expect some consolidation into next week, and that choppiness will bring buying opportunities. Don't wait too long before you buy, as the second quarter earnings that will start coming in around July 9, should make pretty good reading. That would give the market momentum into the traditional summer rally that would take us into mid-August.

Of course, that is total conjecture, but what isn't as far as the market is concerned? All you can do is make your best judgement based on the facts and your experience, and then pull the trigger. Decisiveness is a virtue, but the hesitation waltz will lead you to the poorhouse. One good thing about getting older - the market combat experience is very valuable. I was going to say priceless, but it sure came with a price. Be alert, because there is still a lot of money to be made here, and stay tuned.

The Market Pro - July 1, 1999

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