BIWEEKLY STOCK MARKET COMMENT FOR
June 1, 2003
BIWEEKLY STOCK MARKET COMMENT FOR
June 1, 2003
Stock Market Rally Coming To an End
The stock market rally which began in late March appears to be now ending as we are now approaching major overhead key resistance area's in two indices. The first one will be the Dow level which was achieved last August 22, at level 9,053.54 The other being the level of the S+P 5OO at 965. The Rally we have witnessed has been the strongest Bear market rally in the last 40 months since the beginning of the start of this ongoing Bear Market but I believe it is about to end. The underlying economic fundamentals of the economy still remain poor and we could very well be entering a period where we will soon start to see interest rates move back up. The reasons that I am so cautious at these levels are the following reasons.
VERY POOR ECONOMIC FUNDAMENTALS
1. Corporate America has now for 33 months continued to lay off workers and close plants.
2. Bankruptcy filings for the March quarter are up 9% from a year ago
3. The last 12 months have had 1.6 million Bankruptcy filings hardly the start of a economic recovery.
4. Mortgage foreclosures are at a 3 year high and the second half of the year recovery has been elusive for the last three years.
5. Finally 43% of the unemployed have exhausted all of their benefits without finding a job.
I think caution in the equity market is warranted use close stops and honor them continue to raise cash as I still believe we will penetrate last October's low before this Bear Market is over.Joseph E. Meyer
President of Meyer and Associates
Copyright 1996 Meyer & Associates
Last modified on 07/27/2004
