Are you scratching your head trying to figure out where this market is headed? Or maybe better put, why it's headed up now, when all indications are it should be bouncing along going nowhere or trending down?

Me too, but I have a theory for why it's headed the other way. I can't help but wonder if the fuel behind this rally is the lack of fuel for another crisis.

Can you think of any classes of investment that could be taken behind the woodshed? That's what happened in 1987, with stocks in general. It happened again in 2000 with internet stocks. This one was precipitated from real estate and debt speculation. What's left?

Could all this be happening simply because there are no other misbehaving investment classes? (At least none that we know of.) Maybe so. If true, then it's safe to say confidence in the system, in the economy in general, and the economy's ability to recover from a strong shock in particular is building.

But it won't build forever, not all by itself. The real question therefore becomes: Will these gains prove sustainable? Will the up trend last long enough for some glimmer of hope of recovery to materialize?

Looking back on my careers, all the companies I've worked for and all the great benefits I've earned, I have few regrets. The single one thing I do, however, wish I'd done differently is to have been a more aggressive seller in the stocks of the companies I have worked for.

It's too easy to accumulate stock in your own company. Many companies offer some kind of employee stock purchase plan. Some award stock to employees. Stock options are part of many companies' benefits packages. Does your company have a 401(k) plan? Chances are one of the first investment choices in your company's 401(k) plan is company stock.

Employees nearly always get an employee discount on their company's stock. Who can pass up the chance to buy an asset with appreciation potential at below market price?

I couldn't believe my eyes this morning when I saw this article: Buying Opportunities Are Certain to Return in the Wall Street Journal.

So much can be said in so few words. I hadn't even realized I'd missed a buying opportunity! Ah, but there is hope. The title hints there will be other buying opportunities. It practically begged me to give it a read to find out when and where.

It turns out it's an article about the author's Common Sense market timing strategy. In a nutshell, his system says that market declines of 10% are buying opportunities and that rises of 22% are sell indicators. Those aren't hard and fast trigger points. He says if you want to trade more actively you can set the trigger points closer together, say at 8% and 20%. Or if you don't want that much trading activity, just set them further apart.

The Common Sense timing strategy is intended to take advantage of market volatility. It quantifies the "buy on the dips and sell on the spikes" strategy. That's all fine and well in theory, but I have to ask how one goes about putting it into practice?

Are you buying into this market?

With the US economy looking weak and looking to get weaker, the buying opportunities are here and now. They probably won't last long. My money says we'll bottom out in the coming weeks as all the bad news is factored in and buy programs kick in to start hedging for the eventual upturn.

It's just a question of when. Remember, it's the unknowns that determine where the market will go. What's known is already priced in.

Personally, I'll be doing a little buying myself. I have some gains and losses to reconcile. And a couple of classes of equities could use a little more balancing. By combining the two activities I can both prepare myself for better risk adjusted returns and minimize my tax bite for 2007.

To all in the US: Happy Thanksgiving.

The Fed's little quarter point drop in the overnight funds rate seems to only have worsened market volatility. Bull or bear, up or down. We can't decide whether the subprime problems are tanking the economy and we're headed for recession - which means rates should be dropped in order to stimulate growth - or whether the Dollar is too cheap and inflation is around the corner, which means the Fed ought to tighten up on cash by raising rates.

With all this worry and debate you'd think the market might do more sitting on its hands. That's not the case. Big money places its bets with your money market, mutual fund, pension and 401(k) savings and sets loose the latest releases of their trading programs in the hopes of making a few bucks.

Did you make money in stocks last month? It wasn't qute as easy in October compared to September. Average returns were down a bit from 2.3% in September to a -0.8% last month. Just think. It could have been a bit worse without yesterday's quarter point decrease in the Fed Funds rate. Overall the stock market was just about exactly as risky a place to be in October as it was in September. Volatility increased only slightly from September's 1.7% to 1.8% in October.

S&P500 Least Volatile
We had an interesting mix of stocks making up October's ten least volatile stocks in the S&P 500. Alltel let the pack of our least risky stocks to own in October. Alltel was fully 9 times less risky to own than the overall S&P500 index. The rest of the S&P500's top ten least risky stocks in October was dominated by stocks in the Consumer and Health related industries.

Chalk this article up as just one person's opinion. I don't usually make predictions about coming events. Today's an exception. I think we're in for a real roller coaster ride this week in the stock market.

The Fed starts a two-day meeting on interest rates and the economy tomorrow. The meeting culminates in their policy statement Wednesday afternoon a little after 4pm eastern time. Many seem to think the Fed will drop interest rates another ¼ point, to 4.5 percent. I think the debate leading up to the actual announcement will shift market sentiment first one way and then the other.

It'll be an intense debate, too. Proponents of a cut say the problems in the housing market are leading us into recession. They point to falling home prices and the lack of credit as the principal reasons the Fed should loosen up and let more money flow into the economy. The rebuttal to that argument points to the most recent quarter's 3 point expansion in the US economy. Opponents of a rate cut argue that consumer spending and exports, which have recently been both high and on the increase, have been fueled by an already too cheap Dollar.

Funny, but I heard that lyric only yesterday, the day before the twenty year anniversary of, Black Monday, the 508 point drop in the Dow Jones Industrial Average. Black Monday saw the Dow lose 22.6% of it's value in a single trading day.

I remember where I was, what I was doing and the shock I felt that day. I had little to my name at the time, but what I had was more money than I'd ever had before. Suddenly it was worth nearly a quarter less than it had been before the weekend.

You'd almost have to be living under a rock to have missed the news that Apple will be opening up their iPhone to third party developers. My first reaction to the news was that they were throwing in the towel, giving up, acknowledging there was no way to keep the hackers from prying their way in and providing the average consumer a way to get herself sideways with Apple just because she wanted a cool screen saver program.

But I think it goes deeper than that.

We had quite a turnaround in the S&P500 last month over what we saw in August

Overall I'd say you're just plain unlucky if you did not manage to make money in stocks last month. The average stock in the S&P500 returned 2.3% in September. Not only that, but that return came with little fanfare. Volatility was down from August, and significantly lower than average return. Remember the old song about the monkey throwing darts at the newspaper? In August the monkey made lots of money.