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The Biggest Danger Now Is A Series Of Bear Traps
The Financial Crisis Has Further To Run
Some Bear Market Investments Have Promise
How Long The Bear Might Stick Around
A Contrary Economic Outlook
Another Shameless Plug For Blue Chip Stocks
The Bottom Line This Week

Stock volatility has become so extreme, we had to redraw the charts. Although there have been up and down days as large as those we have seen recently, never before have they come in such quick succession.

Last week, as everyone from New Guinea to New York must know by now, the Dow and the Nasdaq fell 18.2% and 15.3% respectively. That would have been tough enough by itself, but what made the week even more hectic is it contained a 679 point jump that many investors believed was the start of a reversal. 

The market leaped forward again this Monday with a breath taking 936 point surge when U.S and European leaders decided on a coordinated financial rescue plan. Stocks took a breather on Tuesday. Then it plunged 733 points the next day on poor consumer spending data. We must expect more whiplash days as the credit crisis continues to unfold. 

In This Issue:

A Nasty, But Not A Calamitous, Stock Plunge
Our Contrary Opinion
A Cure For The Crisis Is Already Being Applied
It's Time To Do Some Cautious Buying
Stock Buyers Should Sip, Not Gulp
The Bottom Line This Week

People who enjoy excitement must envy investors right now. Not even thrill seekers who travel to New Zealand for the world's highest bungee jump have anything on us. When it comes to big bounces, Wall Street is the place to be.

On Monday of this week, we completed the jumping part of the stock market's bungee experience. The rebound on Tuesday was nearly as exhilarating. Wednesday, thank goodness, was a quiet day of recuperation.

Of course the rubber cord could break at any time, in which case the game will be over. However, that seems very unlikely. If a crash was in the works, we think it would have happened on Monday when deep pessimism was rampant.

The market action we are having now is all the more exciting because there was no hint of it last week. The Dow dropped a tepid 2.2% while the Nasdaq just about doubled it with a 4.0% decline. It was barely enough to be a good warm-up for this week's main event.

In This Issue:

Stocks Plunged, But The Expected Crash Didn't Occur
Many Investors Were Pleased To See Some Bailouts End
A Recession Is More Likely, But It Isn't Assured
Many Companies Are Having A Good Year
It's Time For Bottom Fishers To Unfold Their Nets
The Dollar Rebound May Be Over
The Bottom Line This Week

Looking back at the stock market of last week is like looking at the distant past. Compared to the big changes that have occurred since then, the five day period belonged to a different era. For the record, the Dow and the Nasdaq gained 1.8% and 0.2% respectively.

As everybody knows by now, this week opened with a 504 point plunge after the government failed to find a buyer for Lehman Brothers. The news was a shock because investors expected a repeat of the Bear Stearns shotgun marriage to J.P. Morgan that prevented a stock market quake in March. When the rescue attempt for Lehman fell apart, many investors headed for the door.

There was a brief rebound on Tuesday but stocks plunged another 449 points the next day. High volatility seems likely to continue for quite some time.