Market Comment (S&P 500 1453)

WOW!! We all know that September has a reputation as a horrible month for markets, and we know that October can be even worse. We all know that we are two days away from the anniversary of the infamous September eleventh tragedy. Did the markets need a kick in the pants at this stage? My answer is a resounding “NO”.

Yesterday, Osama dumped on the U.S. …. Mr. Greenspan told us markets now remind him of 1987 …. and the U.S. Government reported that employment (August) weakened for the first time in four years! Three HUGE kicks on the eve of 911 !!

Greenspan has been my hero ever since the days of Ayn Rand. He is a genius, but this comment was not well advised as I see it, even if he turns out to be correct.

I was around in 1987, and I remember a wildly overheated economy and interest rates bulging at about 10 percent. The U.S. was not short of oil or anything else. The Twin Towers were standing taller than the Tower of Babel. The U.S. was not, as I recall, staggering on its economic knees. In 1987 the market crashed after soaring to a height that was totally irrational. Today, markets have retraced post 2001 losses – nothing more. Hardly frothy.

Greenspan is my hero, but I don’t see a crash on the horizon in my own work. I’ll be pleased if we retest the recent S&P 500 low in the area of 1370, before once again challenging resistance at the all-time high now at 1555