While the indices have been topping in the middle of many months (13^th--19^th) this year, I think we see the top of this rally, for 2003, the first Friday of December, concurrent with the Unemployment Report. As we've seen on other employment data "surprise" days, stocks should surge and reverse, ending down for the day or with fractional gains. A down close after an impulse move to new highs would suit me better--creating another outside bearish reversal day that finally gets portfolio managers thinking about preserving their gains for the year.

I'm not saying we can't see higher prices in 2004--that will depend on fundamental data and, to some extent, the dollar, which hasn't impacted stocks to date but should become topic one if stocks see profit-taking. And make no mistake, profit-taking would make some sense.Unlike conditions in the last few quarters, that 8.2% GDP number and strong Q3 earnings have boosted expectations to much higher levels. Whisper numbers are back in vogue--the very reason Wal-Mart started the month with a sell-off after reporting respectable Thanksgiving weekend comps--on top of enormous comps a year ago.

The FOMC meets, again, on the 9^th, and it may just be time for the group to change the language in it's bias statement, time for it to acknowledge the diminished risk of deflation. Can you just picture the bond market if it does? Obviously, the Fed can move to neutral and stay there for as long as it wants--as long as necessary to allow employment to resume expanding--but the bond market's knee-jerk will be expecations of a rate hike, and Chicago will immediately begin pricing it in. With many Home Equity and other loans tied to the 10-yr note, a sell-off in the bond market (which has the inverse impact on rates) will have ripple consequences to debtors--the vast majority of consumers, if truth be told.

Beyond the FOMC meeting lies one other week before two weeks of thin trading and holidays, at the end of the year, with many portfolio managers sure to take some time off--even those who haven't allowed themselves a vacation in months. No one wants to sell into less liquid markets--especially not Portfolio Managers seeking to move blocks of shares without catching much attention or significantly moving the stocks. That leaves PM's no choice but to get their selling done in the second and third week of the month.

Tax loss selling? NOT this year--too many funds have carryforward losses that will allow them to capture gains without tax consequences. That doesn't mean we won't see the year's biggest losers go lower: that happens because the desire to banish losers from the record sent to shareholders at year's end. Ironically, big cap phama has often performed horribly in December, then risen from the grave on the last two days of the year, posting 8--11% gains. Given how broken the group is, it could happen again this year.

The biggest analyst event of the month is NOT the CSFB Technology conference the first week of the month but Intel's mid-quarter update on the 4^th, after the bell--another reason I think we see a surge to the top on the 5^th. Of course, other tech companies will offer mid-quarters, too, but none compare to Intel's influence on so many other companies. Then, again, Intel is a DOW stock, as well, and that's still the headline index--no matter what. Fellow DOW stock, IBM, holds an analyst day on the 4^th, as well. It's last comments were at an early November tech conference, when the CFO sounded more optimistic than he had the month before, when IBM reported earnings. Recall, the market likes surprises. Shifts in sentiment attract more notice than the same old thing--even when the "old" thing is cheery. So, should IBM be even firmer in it's optimism, the DOW will have two components to help it reach for 10K by the 5^th. Of course, both stocks are S&P stocks, as well, and they'll both carry many other members along for the ride: Heck! even Microsoft, one of the lagging tech stocks, could manage another small lift! Speaking of laggards, Hewlett Packard holds it's analyst meeting the second week of the month.

Time was, GE's board would meet the 18^th of December, or so, and raise the dividend every year but it already did that in November, so that's one reliable trade December lacks, this year. Retailers will be another focus but there are very few that can withstand nervous trade--which is what Dec usually means for retail and apparel stocks. November comps are out December 4^th but analysts and traders won't care for more than an hour. The most crucial weeks of the year are dead ahead--and retail will be risky. Again, it's another group with high expectations, especially after last year's weak comps. Traditionally, it's been good to kiss retailers good-bye this time of year, and look to reposition, again, in late January/early February, before the sector reports Christmas and clearance earnings in February.

Cold weather has often boosted the price of and demand for oil, natural gas and coal, so those commodities often perform well in December. However, because commodity prices tend to rise, this month, utilities often suffer--as their rate structure doesn't allow price increases to be immediately recovered from consumers. Of course, OPEC meets the 4^th, and no one expects a production cut. They didn't in September, either, but that's exactly when OPEC announced cuts that went into effect November 1^st. On paper, at least: word is cheating is rampant--as one would expect when prices are high, as they've been. OPEC shows more discipline when it's getting crucified, as it was when crude hit the mid-teens a few years ago.

Biotechs often see a top very early in the month, before reasserting outperformance, in January, in the past thanks to the Hambrecht & Quist's big biotech conference that's morphed into a JP MorganChase "healthcare" conference with greater big cap pharma representation.

CSFB plans a Media & Telecom Conference Week starting the 8^th, and that's another group that's been performing poorly and could see some end of year interest. After all, Christmas ad spending should get analysts enthused about the group, while PC sales often lead to new internet connections, some of which will, surely be broadband this year. Meantime, number portability hasn't, yet, caused a surge in transfers, while newer phones and services are spurring replacements. Also starting the 8^th, Lehman's 3T--Tech, Telecom Trends, though Pauline Kehm at Lehman refused to provide the presenters list, this year. I'm curious to see if the usual video gaming guests are returning. I certainly don't need two telecom conferences in one week, otherwise. Ditto Raymond James' Global Wireless on the 10^th. Speaking of media, though, the holiday movie season is off to a slow start. We'll see if "Lord" and "Samarai" are the right prescription. Licensed toy sales are often integral to strong movie debuts, lacking so far this season.

Casino stocks often rally the first weekend of the month, through the second, thanks to a casino executive meeting and an gaming investment conference that's notable for it's absence, this year. However, there'll be a Racing and Gaming Conference starting the 9^th.

Tech often performs best the first two weeks of the year, then flags the last weeks, as all the orders for the year are largely booked before the 20^th. This is the one quarter that doesn't see a mad dash to close orders the last two weeks. There's potential for some last minute budget flushing, after the Iraq war kept spending to a minimum earlier in the year, and profits have recoveredm, making execs less parsimonious. Likewise, the accelerated depreciation on up to $100K of capital equipment investment should spur some to spend $100K this year AND next. That means tech should see some carryforward of recent momentum, though that doesn't mean warnings won't come. There'll always be some warnings--some companies can't execute in good times or bad. Who warns is what the market will worry about--though with IBM and Intel out of the way by the 4^th, that eliminates two influential names from end of year possibilities. SEMI--the equipment association hosts it's annual awards on the 10^th, while Semicon Japan meets that week, too.

Should the FOMC move to neutrality, of course, the financials could take some gas. Likewise, a friend who owns numerous apartment buildings in Michigan and Ohio tells me rentals are down--both occupancy and monthly average rents. That's a group that will welcome higher rates since it will eliminate more marginal borrowers from the potential homebuying pool.

A number of "calendars" show Internet World Fall, in NY, this month. If it's happening, neither the supposed sponsor nor the Jacob Javits convention center know anything about it. But, speaking of internet, e-tailing usually tapers off just as bricks and mortor retailers are seeing their last, big rush of customers. That means the internet retailing group usually peaks this month, as well, often earlier than other tech stocks. Given the fact that the group has lead the rally, weakening in the group could give some pause.

Gold usually trades up in early December, when India's jewelry manufacturers often stock up for Valentine's Day and Mother's Day deliveries and the Chinese government has often stockpiled--using all it's greenbacks from the trade imbalance. This year we'll get a TRACKR from Merrill Lynch that will hold physical gold and trade like an ETF, allowing retail investors and others to own rights to physical gold without the usual storage issues.

Personally, I don't think analysts or traders care much more about conferences and trade shows, this time of year, than I do. The Quadruple Witch on the 19^th is far more important, since some contracts roll out to March on that day, while NAZ 100 changes will be announced on the close, with S&P changes expected, too, an event traders LOVE to game in advance.

I actually have two predictions for nxt year: E-Tail sales will be added to the overall Retail Sales data reported mid-month and internet taxation will become reality. The ease with which the VAT (Value Added Tax) has been added to overseas sales proves the technology can be deployed with a minimum of fuss. Given the budget deficits many states are facing, the pressure for Washington to enact an internet sales tax will keep growing--might even become an election year issue. Imagine how attractive such a tax would look to troubled California? How 'bout New York? That's two big states losing big time on internet retail sales. An internet sales tax would buoy traditional retailers who must charge tax, now, because of physical locations in nearly every state. Conversely, the internet e-tail darlings could get slammed--something many of them are begging for at current valuations.

Often, early January's biggest winners are culled from December's new low lists. Given the tax loss carryforwards many retain on their books, and this year's spectacular gains, it remains to be seen whether that will work again, this year. However, the small caps have often outperformed in late December and early January and I think there's reasonable potential for that to happen again. What I think will be different is that some really lagging large caps outside big cap pharma could also find late in the year fans. Again, Microsoft comes to mind, as does GE, JNJ, and HPQ.

Last, I'll remind that the market is a discounting mechanism--pricing in change 6 months in advance. The history of election years is a strong market until July/August, then selling towards the end of the year. Whether George Bush or a Democrat wins election in November 2004, the market will begin pricing in the tough mesaures that will be necessary to shrink the deficit and shore up the dollar as soon as the election is over. Enjoy the coming holidays, and the resumption of the rally, next year. Just don't overstay your welcome.

Why NOT? But consider this: because funds had two years worth of tax loss carryforwards, October didn't see the usually tax rebalancing--neither profit-taking to offset losses OR selling to create losses. Therefore, once source of early in the month liquidity for mutual funds will be less fruitful than usual. On the other hand, retail investors have typically held off investing in October, when over two-thirds of funds close their year, to avoid getting saddled with a tax bill for gains they didn't enjoy. This year, retail investor inflows have been building since June, so another source of inflows won't benefit from the build-up of withheld funds that was so typical after October.

In all fairness, another source of November inflows has been rebalancing--portfolio managers who hold to a strict ratio of bonds and equities could create a source of early in the month selling but it's hard to argue that the money will get redeployed quickly into bonds--not with rates remaining so low. Instead, we might see some sector rotation, with funds who've ridden a a group like retail, or tech to recent highs doing some selling so they can buy more beaten down stocks that might rebound in Q4. Theoretically, even biotech looks like a better value than digital tech, when you compare the current level of the biotech induce against any of the digital tech indices. Energy was surely looking like a group likely to reobound in November, as the month closed. Energy services, especially, were starting to appear cheap, especially when you consider that OPEC promised to cut production on November 1, and the heating season launched with a bang--at least in places like Wyoming, that already saw a heavy snowfall as November opened. Of course, New York basked in near 80 degree weather as November opened but not even the most delusional New Yorkers believe that's likely to continue much longer.

Looking ahead, to November's potential highlights, the economic calendar offers some notable time frames. November 6^th promises Chain Store Sales and the preliminary Q3 Productivity and Costs, while the 7^th will deliver the October Unemployment Rate--after a series of weekly claims that all came in below 400K, even as the ranks of continuing claims keep shrinking, since many of the more intransigent unemployed have exhausted even extended benefits. For icing on the cake, the end of that week will see Merrill Lynch host tech firms in Monterey, as it's annual Technology Conference, as well as the first smattering of mid-quarter updates. Based on the Semiconductor industry stats out November 2^nd, the optimism seen in Q3 should carry into November, since chips sales rose 6.5%--17% for Q3--the best seen since 1990.

The 14^th of November stands out, as well, thanks to October Retail Sales, PPI, and the U of Michigan Preliminary Consumer Sentiment numbers for November. Comdex starts the weekend after but it's been years since anything meaningful has come out of that event--so little that Spring Comdex has been canceled. Still, analysts go to Comdex, companies hold meetings and issue mid-quarter updates, so I can't, exactly say it's completely a non-event. It's just not cause, as it was in the mid-1990's, for tech, as a sector, to catch a heady and shoot to the moon.

Then the 26^th, the Federal Reserve issues it's beige book--the 12-district survey of current economic activity that serves to prepare the members of the Federal Open Market Committee (FOMC) for it's next meeting, in early December. Would it surprise anyone if the districts started reporting better activity, if October's momentum carries this month? And if that weren't enough, the bond market closes early on the 26^th, while the stock market closes at 1pm on the 28^th, the bookend "holidays" around Thanksgiving Day on Thursday the 27^th, and typically a very positive series of trading days, for all but retailers, as the market suddenly gets nervous in advance of Black Friday--the day after Thanksgiving and one of the busiest retail days of the year. NOW, I'll admit, should employment seriously rise and the Beige come in much better than expected because companies report plans to hire and recent hiring, it's possible Thanksgiving week will be a turkey. However, I don't see that happening: more lay-off plans accompanied many earnings reports in October, and more will keep coming from businesses not benefiting from consumer spending--which is fueling the industries hitting all time highs, like retail and homebuilding.

So, if we're searching for high points of the month, and believe the markets could surge and consolidate the way they have on nearly two to three-week intervals for a couple of months, it's easy to identify the 6-7^th, 14^th, and 26--28^th as likely pivot points. The only question is whether they'll all pivot up or if one will pivot down. My best guess is we get interim hi's on each of those three occasions, with some churn or pullback between, because the one thing most likely to derail this rally would be higher rates, and Greenspan and company have been explicit in their insistence that rates will stay down as long as inflation and employment do. For now, lay-off announcements are still the norm, and inflation isn't showing up in the core CPI because companies don't feel they have pricing power--fear they'll lose share if they try and raise prices--just as some airlines have tried to do many times, only to reverse when competitors didn't go along and raise prices too.

September, which was shaping up as one of the best in history this year, gave back it all back in the last week of the month, a reversal attributed to G-7 comments on global monetary policy and a surprise OPEC production cut planned for November 1, facilitated by data that surprised to the downside after a strong summer rebound. I believe at least some of the pullback should have been expected after exceptionally strong data in July, as Asian companies emerged from SARS induced hibernation. Given the sharp giveback, it was very nice of the powers that be to introduce a new Exchange Traded Fund, on October 1^st, ONEQ, which tracks the whole Nasdaq Index, the index--coincidence?!*--that had lost the most in September's end of month sell off.

What surprises most is how little was written or said about this new ETF prior to it's October 1^st debut--a rush of buying pressure no one expected, since it must hold the entire underlying NAZ Comp, as opposed to the QQQ, which holds only the NAZ 100. Just another force working so very hard to turn around the economy and markets, fully endorsed by the Federal Reserve Bank and Congress. SOP for a pre-presidential election year --in spades. So this year, after a six month rally, Octobophobia--fear of market declines in October, a word coined here first in 1997--will meet an all new Octobophobia--fear of underperforming the indices for the year. The end result may mean the markets escape a crushing sell-off and retest of year ago lows but doesn't eliminate, entirely, the potential for losses. What the markets had on their side internally, even on the worst late September days, were prior bullish comments from the likes of companies like Intel, as well as resilience in the financials.

On the calendar this year, as in years past, the earnings season looms large, ahead, as well as an FOMC meeting that will be preceded by the Fed's Beige book, which is prepared for the FOMC in advance of it's ten meetings a year. Of course, no one expects rates to rise for "a considerable period of time," as long as employment data remains weak, so it's the FED's statements that count, but only to the media: Chicago is no longer paying much attention and running it's own bets on what, exactly, the Fed means by "considerable.".

Tech and biotech trade shows and conferences also return in force, which hasn't often helped digital tech but has often boosted biotech, another group that sold off deeply last month. For the first time in three years, tech has easy comps and should meet or beat expectations, thanks to some analyst restraint. That potential should combine with the other previously named bullish influences to temper any sell off this year. Of course, weakness in the dollar has recently pressured stocks and rates, since response to a too weak dollar should be raised rates but the Bank of Japan has been doing everything possible to keep the decline "orderly, " while many multinationals will actually benefit when their foreign sales are repatriated into greenbacks. For instance, a company like Coca-Cola derives 75% of it's revenues overseas, which should make up for flat sales back home. (NO, that is not a recommendation unless you like to bury your money under a mattress for a few months: the stock has been rangebound in too tight a range to make it interesting)

Besides Biotechs, retailers have often outperformed the markets in October, as anticipation for holiday sales build. Given last year's weak spending, few retailers have enormous hurdles to top and, with rates still backing down as the month opened, prices at the gas pumps way off Labor Day weekend hi's, and itty bitty benefits from the recent tax cuts showing up in every paycheck, the group should repeat historical performance. (Just watch out for those that had a bad September around the 9^th, when Chain Store Sales are announced.)

Gold has often sold off in October but a replay depends more on dollar action, which started the month favoring strength in gold, which performs inverse to the dollar. In addition, a long planned ETF for Gold, proposed symbol, GLD, should create demand, since it's intent is to hold actual bullion instead of mining companies, and provide a means by which small investors can own gold without buying individual coins or searching for storage for their bars of ingot. (I'd bet that the ETF debuts during an especially weak week for gold the way ONEQ did but it's been so long in planning and regulatory purgatory, I don't think the sponsors have much control over when it will debut.) Additionally, China has often been a big buyer of gold in December, so current goldbug holders are likely to hold tight through some drawdown, if there is any which, as I said, the dollar is suggesting there won't be, beyond short term relief rallies.

Airlines have often outperformed in October, on anticipation of a strong winter travel season but the group has been so strong, there's already years of better times built in, which means ya gotta wait for a pullback. Ditto the cruise industry. What about online travel sites, you ask?

Well, online retailing is the "tech" exception in October, and usually builds momentum as the month goes on. Don't care if the company retails travel or schmatas, retail outperforms, which means you wait for a dip and swoop in. Anciliary to the strength in retail, there's often some strength in forest products and papers (think shopping bags, gift and shipping boxes), as well as package delivery companies, while automakers often cool for a month. Furniture stores tend to pick up in November, rather than October, while department and specialty stores often peak in late November, right before Black Friday, so keep that in mind. They'll usually manage another run that often commences end of January--to early February, before the group reports earnings and in the midst of it's winter clearance sales.

While digital tech has often performed worst in October, the lone exceptions, have often been telco's. However, this year, the Supreme Court, which reconvenes, this month, will consider a coupla telecommunications cases, the outcome of which could go either way, making the group especially questionable this year. For the wireless providers, the coming phone number portability act, scheduled to go into effect on November 24^th, will not only loft a big question mark over the group but, could worry analysts as offers ratchet up, tremendously increasing retention and acquisition costs while threatening individual subscriber profitiability for years to come. I wouldn't want to play there this year, though the upshot should be strength for the handset makers and advertising.

Advertising often outperforms in October, as the new TV schedule, and political and holiday media buys pick up, along with classified ads. Beverage makers, particularly the alcoholic type, often see a spurt in advance of holiday parties, and during the rush of football season and the baseball play-offs, which arrive just as the hockey and basketball preseason and college season collide to flood the TV schedule. Another group that often bottoms in October is energy: producers, refiners, and drillers/services, though that sometimes doesn't happen until well into the month, which means ya gotta be patient, unless it's an unusually cold month.

The markets are entering the dangerous season, just as the bond markets are pricing in the recovery the equity markets priced in beginning in March. Unfortunately, the bond market pushed rates up so high, so fast, as the month opened, equities were forced to contend with both asset allocation and a flood of new supply from a $60b US Treasury slate of offerings, even as the weakest quarter of the year for equity returns opened. That's a slug of headwinds for a rally that was getting long in the tooth even without the additional issues.

Traditionally, the focus in August has moved to retail, both because the group reports most of it's earnings in the month but, also, because the month is the official beginning of back-to-school--often accepted as a gauge for consumer spending. While the tax rebate checks that started going out at the end of July offered added cause for optimism, the back up in rates sapped it all, and then some. With credit card finance charges tied to rates, and many homeowners facing the potential for higher payments when their adjustable rate mortgages are reset, what's going on in bondland will send wide-ranging ripples throughout the consumer sector--the one sector that held up during the three year bear market.

Furthermore, while everyone has waited for corporate spending to increase, August is often the slowest month of the year for business, with Europe all but closed, and inventory build for back-to-school, as well as holiday sales, already accounted for. With government spending accounting for a large portion of the Q2 increase in GDP, it's unlikely that business will get much of a Q3 boost from that sector, either, since the fiscal year ends on October 1^st, and departmental budgets are often spent by now, with Congress rarely able to set a new budget agreement by the first of the fiscal year.

On the trade show and investment conference front, the schedule is lighter, this year, than it's been since 1993. Not only have the number of attendees at trade shows fallen off in the last two years, as companies sought to cut costs, but the proliferation of trade shows during the bubble years has reversed, with quantities shrinking. Add to that a period for analyst vacations, and a number of Asian shows--even some rescheduled from earlier in the new year--cancelled because of SARS, and the markets will suddenly find itself cut off from a once active news flow. Lost to SARS, especially, are some previously pivotal tech trade shows for communications, chips, and semiconductor equipment. What's left melds well with the retail focus mentioned above.

FASHION WEEK in New York leads the trade parade, which is, officially, the debut of cruise and spring but, in actuality, is where many store buyers set the last of their holiday orders--especially off-price orders for fall merchandise already shipped and offered below original cost, usually to those stores that ordered before but, in practice, actually available to everyone. Based on the trade magazines I've been looking through, "waistlines" will keep falling, while Oriental touches are big, and shoes are rounding out and flattening after years of pointy toes and platforms. The Oriental closures and patterns are already abundant in the teen stores for fall, so most spring lines will look a bit like catch-up.

The second big show of the months is the International Gift Show, in New York, again a last chance for holiday orders, while a place where new lines are introduced for Valentine's Day, Mother's Day and beyond. If you wonder how any shop owner can think or plan that far in advance, it's what they do: when I owned ski stores, I placed my orders in Europe, in March, for the entire August through December delivery timeframe, and could reorder ONLY when a merchant cancelled or had it's credit cut-off. Since computers were first entering retail at the time, and supply chain and data-mining were new, expensive, and available only to the biggest retail chains, buying was more science than art. Today, almost every retailer has the benefit of computers and it still hasn't helped: retailers offer nearly weekly sales and coupons but the trend has been to cut back on inventory, while sourcing at lower priced producers so margins can start at higher levels. With the dollar so weak, there's even more incentive for retailers to keep inventories low.

Both Fashion Week and the NY Gift Show will be followed with similar but smaller events across the country, most notably in Chicago, Las Vegas, Los Angeles, Atlanta, and Dallas, so combined with retailer earnings, it's a no brainer to expect retail and apparel manufacturers to steal the spotlight for the next month. Heck, even the PGA Show is in August, though NBC seems to think everyday is golf day.

Another big show, this month, is International Hardware Week, where Home Depot, Lowes, and their suppliers are as common as builders and designers. This group is also watching the rise in rates with a queasy stomach, since refinancings have done so much to encourage consumer spending.

In tech, there are a number of communications events though the two biggest are engineering events, with presentations on technology that's years away. ISCE, for Satellite Communications falls the third week of the month. There are a couple of tech in education events but, trust me, schools are pretty much done ordering for the next couple of months. Now it's all up to kids heading back to school where portables are edging out desktops, just as they are for corporate players. Convergence is an annual event that started at the end of July, while it will be late in the month before commercial Graphics meets, by which time we'll already have had Hewlett-Packard and Dell Incorporated weigh in with earnings, which Cisco will beat them to early in the month. Speaking of HPQ, HP World starts on the 11^th, in Atlanta, with Carly Fiorina not listed as a speaker as of this posting. Search Engine Strategies and an internet Advertising Forum include many of the same groups, as the internet sector continues to consolidate, a trend I suspect will continue. Internet and Multimedia, in Hawaii, is an offshoot of some of the communications engineering meetings, with Signal Processing the real, lead event. Plug.In, at the end of the month is more conference than trade show, which hardly competes with the Vivendi watch--waiting to see how Vivendi's entertainment assets will be divided.

The "hoped-for: blockbuster season finishes off with a flourish of new movies early in the month, while both the Venice Film Festival and DVD Entertainment wait until the third week. Miami could rock with the BillBoard event, starting August 6^th but media is finishing it's confessional season, with both XMSR and Sirius Satellite Radio set to report the first week of the month. For video gamers, the action's all overseas, with both Games and ECTS in Europe (a counterpart to E3 here), after the third week of the month.

Healthcare and biotech promise Dentists, Funeral Directors, Diabetes, Human Genetics in Australia, an agri-bio event, an industrial microorganism event, BioDefense, and bio-nanotech world, a new field of research that some believe promises all new science and breakthroughs. Optometrics hold a meeting but I toss that group in with fashion, wince colored contact lenses and eyewear is all about fashion--with Lenscrafters one of the busiest stores in the local mall right before school starts. The really big events for these groups are scheduled in spring and fall, so there's only the FDA to really spark flames this month.

A meeting on Mold for the insurance industry could shake that sector up in mid-month, though most homeowners have found mold exclusions in their renewal policies. The American Bar Association meets during the month, so mold should be a topic there, too, with many insurers fighting existing homeowner problems, and some fearing mold could become as big an issue as asbestos is.

Adams, Harkness, Hill, and Baird & Company plan early in the month small cap conferences, while CIBC hosts an enterprise Software conference but, otherwise, analyst meetings are few and far between, this month, which brings us back to where we started.

Longtime readers no nothing influences me as much as seasonality and events. Within those headings, major milestones rarely get rescheduled. School still starts in the fall, Christmas can't be rescheduled, the New Year always begins on January 1^st, and despite a recent movement to allow e-filers tosubmit taxes as late as April 30^th, the formal deadline for personal income taxes and deposits into retirement accounts remains April 15^th. So, despite the recent rally, and despite analyst promises (again) of a second half recovery, I expect market seasonality to rule, with the first few weeks of July dominated by earnings nervousness and warnings, causing an additional pullback from recent highs. Aside from the first few days of the month--every month--that often sees fund inflows that help lend the markets an upward bias, I think July will see a pullback that lasts until at least after the options expiry on the 18^th.

Of course, beyond the usual July facts of life, which include earnings ramping up, with the busiest week the week after expiry, this year holds an oddity or two. Most notable is the child credit tax rebates which are supposed to start going out on July 25^th. Since the last tax rebate saw retailers benefit, expect analysts to anticipate that happening again. While many schools, particularly in the north, don't resume until after Labor Day, down here, in the south, classes start as early as August 11^th, as do some colleges, which means the tax rebates will hit mailboxes just in time for back-to-school shopping. That should change everything, since retailers have often entered a trading slump after their May earnings season, with relief unseen sometimes until late September or early October, when techs often suffer the worst of their fall sell-off. This year's rebate should put a floor under the retail sector.

The new, lower, 15% maximum long-term capital gains tax also changes everything, enabling investors to consider selling  way in advance of the fall sell-off, while getting out is still good. The new law applies to sales that took place after May 1^st, so any pullback we see in July could prompt even buy and hold types to pull the trigger. After all, if they held throughout the bear, and rode their shares back up in the most recent rally, that 15% maximum rate could serve as a tremendous incentive to cast off inertia.

The options pits have added a newer wrinkle in the past few weeks, deciding to offer strikes at dollar increments, especially on stocks that trade for less than $20. That will make it easier for more savvy traders to sell shares and buy cheaper options as replacement, at strikes much closer to their share sale price. Again, being able to capture gains and shell out less for a replacement proxy could inspire some to sell.

When a quarter ends, portfolio managers often rebalance. After the recent rally, which saw the NASDAQ so far outpace other indices, with tech, especially, now trading at bubble-worthy multiples, it's likely we'll see more rebalance activity, which will pressure the quarter's biggest gainers. If individual investors have finally learned their lesson, after a three year bear market, some of them might rebalance, as well.

Beyond the usual end of quarter earnings and data, like Advanced GDP, the trade show schedule is greatly changed from year's past. The number of shows scheduled, overall, have shrunk significantly off the bubble highs. But beyond that predictable shrinkage in a post-bubble world, some show producers have gone belly-up, while SARS led to premature cancellation or postponement of others, leaving the fall schedule heavier than it would have been otherwise, while July has shriveled. Nonetheless, as is usual, tech dominates, with some predictable ones still likely to dominate conversation.

Apple will hold MacWorld in New York during earnings sweep week, as usual, though some new products were introduced at it's recent DevCon. Still, with the success of iPod and it's paid music site, one suspects Apple has some more consumer products up it's sleeve, with MacWorld the place they're most likely to be introduced. The Microsoft Analyst Meeting on the 24th has rarely inspired the enthusiasm Jobs does at MacWorld.

Homeland security is the broad title for a couple of events, with technology the focus of one, ports and shipping the focus of another, even as the TSA cuts back the number of screeners.

Transworld holds it's usual Chicago Gift show, which will be another reason for analyst to wax enthusiastically about retail, particularly back-to-school and the coming holiday season. Given the number of hoped for movie blockbusters scheduled to open for the July 4^th weekend, and the phenomenal success of the recent 5^th Harry Potter book, as well as Finding Nemo, the stage is set for analyst optimism.

Food technology, property security, and the American Convention of Meat Processors are no match for the enormous Tech expo in Japan or Semicon West, both in the middle of the month. Which isn't to say I expect retail analysts to get overly excited about PC or laptop sales for back-to-school but I'll bet they'll soon look ahead to number portability, which goes into effect on November 24^th, and suggest handset makers should have a banner fall, aided by the proliferation of wireless access hotspots, be they at airports, Starbux or on college campuses.

In the area of drug discovery and medical society meetings, Alzheimers should attract a lot of attention, especially as boomers start dealing with parents' failing memories and start worrying about their own hereditary tendencies--even though no one has ever proven the disease is hereditary.

Repeat offenders include DVD, Embedded Systems and Jupiter's Plug.in, though it's Allen and Company's hush-hush summit, by invitation only, out in Sun Valley, that will get the buzz, especially if Congress lets stand the FCC's new, expansive, media ownership rules. Not to neglect a group, but Human Resource and Printing  (Siggraph) don't hold a candle to the Storage and Storage Networking Expo--especially since the storage sector seems to be outperforming all other tech.

Alan Greenspan ought to make his semi-annual trek to Congress, to give testimony on the way to dessert--the question and answer period, where the '04 elections are sure to inspire some grandstanding, with Greenspan really hardpressed to give answers. Twelve cuts have led to a thirteenth, will little left to cut, and the economy still evinces no hint of robustness. On the contrary, talk of deflation has outstripped recovery, even as the bond market has started bidding down bonds, elevating rates,with low rates key to spurring capital investment-- key to raising demand, something still missing from the economy.

When May data was released in June, many were disappointed that post-war relief didn't deliver the hoped for pick up in economic activity. But, with unusually rainy and cold weather, Mad Cow in Canada, as well as SARS impacting corporations, the markets were too giddy with the rally and Greenspan's promised additional "insurance" cut to trade off. Now, however, with Mad Cow off everyone's radar screens, and SARS in remission, the data could very well be taken more to heart, with earnings warnings coloring perceptions even more.

As May ended with a powerful surge to the upside, led by financials and biotechs, I wondered if this time is different--if a viscious bear market had actually ended in October 2002, and whether the markets could end June reasonably higher than they started the month or, whether the markets would undergo the pullback I've been expecting since the middle of May. For once, my opinion diverges from the charts and, since technicals have ruled for months, I'm not sure my opinion should count, at all. For the record, I think the markets are way ahead of the fundamentals. For weeks, members of the Federal Reserve have been pontificating on ways to keep deflation at bay but the markets are acting like the recovery is imminent--even as the bond market is acting like deflation is already in place. The bond market is pricing in another rate cut but stocks are pricing in expansion. Only one can be right and my money's on the bond market. Having said that, I can talk about what's coming up in June--other than the market's direction which I think should be down, even if it won't be.

Two major events stand out this month: OPEC's Dubai meeting on June 11^th, at which it's threatening to cut production, and the June 24/25 FOMC meeting, which means a Beige book is out in June since those are prepared ten times a year to prepare the Open Market Committee for it's rate decision.

On June 6, the preliminary rebalancing of the Russell Indices will be announced, which should result in month-long positioning by funds, though the actual rebalance won't take place until July rolls around. Likewise, the S&P editors will begin their search for rebalance candidates, which means the analysts will be screening for them, too. Oddly, the best bets are often not those admitted but amongst those ousted, as soon as they're dropped, since those often rise up to 20% once the indexers finish dumping 'em.

June 2 the FCC meets to vote on expanding the number of outlets media companies can own in a single market and, as May ended, Commissioner Powell was certain his plan for expanded ownership would finally pass, making media a spotlight group this month.

ASCO opened on May 30. For the first time this year, the abstracts to be presented were embargoed until the doors to the conference opened to attending oncologists. Given the rise the biotech sector had leading up to the meeting, I wouldn't be surprised if the group pulled back in June--almost from the getgo.

Book Expo meets in June but that's secondary to the on-sale date of Rowling's latest Potter book, which should help Scholastic recover from it's winter warning and more recent announcement of lay-offs and charges. Likewise, Marvel's long awaited feature film based on the Incredible Hulk debuts almost the same day, June 21, so those two companies are sure to be named more times than you'll care to hear.

June is also the month of mid-quarter updates, with Intel's, on June 5^th, sure to be one of the most closely watched. Of course, Novellus gave a less than bullish mid-quarter update as May ended and the stock rocketed higher anyway, so it remains to be seen not only what Intel will have to say but how the markets will react. Lately, bad news has been good news, since even adverse economic data convinces traders that the Federal Reserve, worried about deflation, will be forced to cut rates, if not take even more drastic measures, to guard against an anemic recovery or worse. Of course, with the markets already pricing in a recovery, one has to wonder what deflation the Fed is worried about--or what recovery the markets are already celebrating.

Retailers must be chomping at the bit at the thought of child credit checks being shipped out to parents, now that the "stimulus" tax package has been passed. Of course, that enthusiasm might be misplaced, based on the 2001 cuts which arrived in time for back-to-school shopping, while this one could arrive after the kids have left for camp. Hey, maybe it's airlines and hotels that will finally catch a break as parents decide they should spend the money on themselves--after all they're the ones who earned it.

The trade show and investment conference schedule cranks up one last time before July earnings nearly suspend them through Labor Day. The first week brings SuperComm in Atlanta, as well as Internet World London, with hope for both groups higher than they've been in years. Less frequent shows involve Waste, Robots & Vision, Pork, Coffee, JavaOne, Licensing, Nepcon, Managed Care, a Dolllar Store Expo, Lawn & Garden, Collections, Foundries (in Dusseldorf), NEXPO (newpapers), Optometrists, CeBIT, Hotels & Restaurants, NetSecurity, Reinsurance, Laser Photonics & Fibercom (Munich), Telecom Billing, WiFi, ICAS--for Computer Aided Surgery, Entertainment Technology, Fancy Foods & Confections, and a host of DevCons, including ones from Apple, Oracle, IBM, Microsoft, BEA Systems, SAP and others.

Of course, the month will bring, in addition to many mid-quarter updates, unscheduled earnings warnings, and the likelihood of more research about pension shortfalls at major companies--not to mention more debate about expensing options, which would wipe out many a tech company's reported earnings. For many years past.

June has often seen a pullback off the post-April earnings rally, with the first week of July often the high point for warnings, soon after the quarter closes. While there's much reason to expect, finally, implementation of some of the projects that were put off during the lead up to, and while the war was ongoing, which should certainly position demand above the pace seen during Q1, there's little reason to expect a rebound to sustain during the summer. Likewise, a June pullback isn't often reversed until late in July, when earnings spark a relief rally--though often not until nearly two-thirds of the S&P have already reported--until the week after Juy expiry, to be exact. Given the fact that I expect many postponed deals to finally close, I expect this June to see a more shallow pullback than some have been but, still, it's a pullback I expect, even if I'm unsure of when it it will start--a rarity, if truth be known.

But suppose the May data out in June isn't supportive of this rally--especially the Unemployment Report expected on June 6. And suppose OPEC does cut production on the 11^th, and the quotas stick, which would cause a rise in oil, at a time when people drive more and use their air conditioners. And suppose the 40 states in budget distress start raising taxes, as New York has done. And suppose people who got into the market in the early 90's and are still sitting are gains they can now take at a max 15% start to sell 'cause they see the markets pulling back and worry that a "pullback" will lead to lower lows, as every pullback has done since 2001-- Then suppose the money managers who are sitting on 20% and better gains for the year decide they can best protect their year's returns by sitting in cash until late October, when the end of year rally often gets underway. Then suppose SARS really is impacting demand in Asia, ex-Japan, the one bright spot for demand in the world--until, possibly, recently.

Longtime readers know I usually start the year with the assumption that interim tops will be made around February 5^th, May 5^th, and August 5^th, with the best buying opportunity around October 28^th. However, those dates aren't hard and fast until I see the year's calendar. This year, the calendar supports a top anytime between Friday, May 2, and Monday, May 19^th, with May 15^th/16^th the most probable date. To understand why the top should come May 15^th or 16^th, all you have to do is look at the calendar of fundamental and economic events. On the fundamental side, May 13^th will bring Deutsche Bank's Semi & Semi Equipment conference in Las Vegas, May 14^th promises IBM's Annual Analyst meeting, while May 15th both Dell Computer's Earnings as well as Intel's Analyst Meeting are scheduled. On the trade calendar, a number of usually market-moving Asian events have been cancelled due to SARS, which leaves the top events of the month, beyond those corporate events mentioned above,  the May 6^th FOMC meeting and JPMorgan's Tech & Telecom conference the same week, with most of the subsequent events more important to pharma and biotechs than techs and financials--the two groups that usually lead healthy  advances with legs.

Which isn't to take away anything from Biotech--the group has been stellar, breaking through resistance first, and still powering ahead but we've seen instances when Biotech has risen and the rest of the market has fallen, so biotech won't hold the rally together. Just for the record, though, Immunology, Infectious Diseases, Psychiatrists, Digestive Disease Week, Microbiology, Cataracts & Refractive Surgery, with the most market reactive event--ASCO: for Clinical Oncology--scheduled for May 29th, with this, the first year, all abstracts are embargoed until members enter the meeting. In the past, abstracts were released to members 30 days in advance, allowing even Wall Street insider "members" to trade on the news before public release.

On the earnings front, aside from Cisco on May 6^th, Dell on the 15^th, and Hewlett-Packard on the 20^th,  techs, pharma, and financials are largely done reporting and focus shifts to retailers--which offer less suspense because almost all of them report monthly sales-- Chain Store Sales data--with most of those reporting this month also reporting quarterly revenue or comps at the time they report their monthly sales. Clearly, all retailers weren't winners. Besides the ones that already pre-announced, we know from Wal-Mart's Weekly sales released on Mondays that business hasn't quite met plan and others were impacted by unusual weather--a New York snowstorm in April--as well as the war. However, retailers rarely bomb as many fear while economists are fretting about the consumer slowing down and, ironically, with automakers reporting slower sales, many retailers may deliver upside surprises. We've often seen retailers do better when consumers haven't just blown a wad on new autos. However, we've seen many times when the averages are declining severely even as retailers and other consumer stocks rose smartly.

So, the question is whether this month will be different than most Mays of the past, which have traditionally seen declines that were only prelude to even steeper declines in June. Broadly speaking, to answer the question, we have to ask whether the recent rally is just another bear market rally or the market forecasting an economic recovery 6 months out. IF the market, as it is supposed to do, is forecasting a November economic recovery, I don't think anyone would necessarily quibble with the possibility. However, that still leaves open the question of the market's current level, the lack of demand, and whether the market has, already, priced in the November recovery.

Well, it’s April, and our minds turn to spring even as the weather occasionally reminds us we’re not quite there yet. Sort of like war, and the march to Baghdad. There are victories everyday—from the fewer than expected oil field fires to additional cities secured—but the war is far from over and the market knows it. In fact, the end of the war remains too distant to predict, so it will be news, and technicals that rule the action, until earnings arrive. Oy vey!

Clearly, the data out suggests the economy slowed, again, in the quarter just closed. Yet costs clearly rose: though crude is back near $30 a barrel after falling into the $20’s, it spent enough of the quarter at higher prices, which led many regulators to approve rate increases. There isn’t a business unaffected by rising crude, some doubly so as they power they're manufacturing plants and fill-up trucks making deliveries.

So, there are two things, at least to look forward to, this month: an extra day off on Good Friday, and a bye on FOMC meetings until early May. As often happens, investment conferences take a breather while analysts stay pinned to post-earnings conference calls--with Alcoa leading the way the first week of the month, and the vast majority of reports coming during expiry week, the third week of the month. Also expected on the last Tuesday of the month, ECI—the Employment Cost Index which has been rising thanks to rising healthcare costs. Missing, also, this month, Comdex, a formerly semi-annual event with April the spring show. However, the show has fallen victim to both slower tech sales and the decline in the show’s producer.  

Big trade shows include Hannover Fair, in Germany, for automation equipment. SemiCon Europe and Singapore (Cancelled due to SARS), High Point—the International Furniture Show, Transworld’s Gift & Jewelry Show, Supply Chain World, SAN West, which is co-located with the National Association of Broadcasters, a group with egg on it’s face thanks to Peter Arnett and Geraldo Rivera. There’s also a Semicon for Flat Panel Displays, one of the bright spots in consumer electronics, Storage Management, Broadband Wireless World, All Optical Networks (AON), NY and Am. Indian Gaming, ISPcon, Global IP carriers, Europe, Satellite Entertainment, two Space conferences, a Fuel Cell Vehicles, a Precious Metals Conference, Game Market Week, the New York Auto Show, a couple of Retail events related to marketing and technology, Burn, Allergy, Cancer Research, Vaccine, Proteomics, Plant and Experimental Biology, Neurology, Urology, Cornea Congress, Am. Hospital Association, Oracle AppsWorld, …..stop me before I crack . Your eyes glazing over? Exactly: none of it holds a candle to war, technicals and earnings.

When we speak the Ides of March, we really mean it this year because it seems probably that the U.S. will be at war with Iraq sometime during this month. Probably not around the 3^rd, when there’ll be a new moon but sometime, perhaps even by the end of the month, at the time of the next new moon. As frustrating as it is, we enter the new month in the same limbo we’ve been in for months with near certainty that we’re closer to resolution than we’ve been before.

March has usually been one of the worst months of the year, for tech in particular. IF we go to war and rally in relief, that may change. However, since President Bush all but declared war on Saddam Hussein back in August and still hasn’t acted, I’ll write as if the war won’t happen this month, and give it to ya straight—within the context of the hand we’ve been dealt..

While cruise and airline companies often outperform in March, I can’t imagine that happening to the airlines this year. The problems they face are so severe, with weather regularly impacting flights for the first time in many winters. Can’t say I’m psyched about cruise lines this year, either.

Retailers have often outperformed in March but I don’t think that will happen this year, either. Mind you, I don’t believe the consumer has seriously cut back spending for the long haul, I just think it’s the winter doldrums, combined with treacherous weather and the high cost of heating homes and driving the SUV that’s put a damper on spending. Then, with Easter towards the end of April, this year, unlike last year when it fell at the end of March, there’s less reason to spruce of the wardrobe in March.

R.E.I.T.’s and mining shares have often way outperformed the markets in March but this year could be different. R.E.I.T.’s will lose their advantage if the President’s tax-free dividend proposal passes Congress. Mining is more psychology, this year. Gold has clearly benefited from the threat of war so will trade on sentiment more than normal seasonal fashion, though the two could converge this March, if we're closer to but still not AT war by the end of the month.

In a trend that picked up converts in recent years, mid-quarter updates from tech companies will vie, this year, with March earnings’ releases from retailers. Truth is, I’m not that pessimistic about the mid-quarters: Asia, reportedly, remains strong, while the U.S. and Europe are plugging away on the flat line—a HUGE improvement over the past coupla years, when tech spending suffered relentless cutbacks. A steady but no longer falling level of tech spending in the U.S, combined with seriously favorable foreign exchange for European buyers, along with strong non-Japan Asian spending and low expectations should be the right mixture for tech to disappoint less this month. Normally, a lack of bad news builds into the perception of good news but, with war overhanging sentiment, I don’t think tech will run away to the upside. Nonetheless, I think there’s at least a chance that tech can avoid suffering steep losses this March and, maybe, trade in line with the market, or better.

The European Central Bank and U.K. banking regulators all meet early in the month, before the FOMC meets on the 18^th. There’s reason for and rumor that the EU will cut rates but I wouldn’t count on it. The ECB is aware that holding rates has helped strengthen the Euro so I think there’s better than a 50% shot rates are held steady. The strength of the Euro is a matter of outsized pride. I think we can all agree there’s little likelihood of the FOMC cutting rates: Greenspan’s most recent testimony before Congress made it clear that, if anything, there’s sufficient stimulus in the system and the growing budget deficit will eventually lead to increases not cuts. Since there’s zero chance the FOMC will raise rates, unchanged is the word. However, Richard Lees, at 21forward.com, who I’ve often mentioned would want you to know what the Fed does publicly and what it does behind the scenes are two different things: the FED has recently loosened, according to Richard.

Investment conferences tick up again, in March, cause  so easy  to lure Portfolio Managers to warm climes, like Florida, Arizona, and southern California in the depths of winter. I don’t think they mean much more than retailer earnings this month--it's mid-quarters and war talk that will rule. One of the headline events this month is Game Developers/GamEx, so don’t be surprised if the video game sector mounts a little rally. The CEA meeting won’t mean much—there’s NO defining next great thing on the horizon. While mobile/portable and wireless remain the focus of new products, with wireless internet access coming to every appliance near you, this isn’t news—it’s evolutionary not revolutionary.

Major pharma/biotech conferences on the Investment Banking side pale compared to the medical society meetings, like Infectious Diseases, Cardiology, Allergy, Asthma & Immunology, Toxicology, Aging, Alzheimer’s, Pain, HIV Vaccine Development, Neurology, and Dermatology are just some of this month’s headline meetings that will grab headlines: none of the SEC’s disclosure rules have changed the practice of medical journals releasing data in conjunction with medical society conferences, nor have the medical journals’ embargoes of information prior to publication been changed. However, society members often have early access to the information so stocks will often move before the public release.

CeBit, in Germany, is one of the headline tech events but it’s the mid-quarter updates that will steal the limelight. And warnings. Yes, there it is: March is the month for earnings warnings, though rarely from software companies that close most of their deals in the last two weeks of the quarter.

As for economic data out this month, I don’t expect too many upside surprises and presume there’ll be disappointments more often than not. The combination of one of the snowiest winters in years and the high cost of energy have dampened discretionary spending. But more importantly, records for housing and autos, for instance, have often been followed by comparatively disappointing data. Most important, consumers no longer believe they have to lock in low rates or zero financing or lose the opportunity of a lifetime: there’s little urgency to run out and "buy NOW." For that reason, spending should have tapered off. On the other hand, as I mentioned, corporate spending should have remained steady and, in some cases rebounded after end of year holidays, when little business got done.

I’m not super negative on the markets, now. I don’t believe they have to collapse in March. But I don’t think we’ll rocket, either, at least not if there isn’t resolution of the Iraqi situation. And, short of war, I don’t believe there will be resolution. President Bush has made it clear he will stop at nothing but regime change, and that won’t be accomplished without force. Doesn’t matter that as I write the wire services are reporting Iraq has begun destroying the Al-Samoud 2 missiles that exceed the U.N. allowed range. George Bush has made up his mind.

Normally, I'd be telling you it's time to get into retail for a run that often lasts well into May. Normally I'd be talking about the cruise industry entering the wave--the big winter cruise and spring bookings period. I'd be telling you that energy stocks start seeing accumulation, with a high not likely before April. I'd tell you that REITs and gold outperform in March, so you'll want to start looking for bottoms in those groups, some time this month. Problem is, it's not normal times.

While, aside from those that already warned, I think retailers managed to make their numbers, it isn't farfetched to imagine that people may shun malls right before war starts, afraid of terrorism. It's also not hard to imagine people staying home to watch the war's progress, should it start.

Crude prices have been high because of both the "war premium" and Argentina's strike, (now disintegrating, which has allowed flows to restart), so it's hard to imagine that we can talk about "normally" since crude isn't normally priced. Having said that, I think those drillers involved in natural gas discovery and production will soon see contracts, since low activity and a cold winter have left reserves lower than normal with prices quite high. But the majors? Heck! Their charts haven't even benefited from high prices.

REITs seem a less secure bet, this year, when the President is calling for Congress to remove their tax advantage, by making ALL dividends tax free to individuals, as long as the distributing corporation has paid taxes. Well, REITs don't qualify, they don't pay taxes because they distribute 90% of their earnings to share holders.

GOLD? It's now trading at a multi-decade high and, though, gold bugs are calling for even higher prices, I don't think anyone would be surprised to see gold trade down if Saddam Hussein is dispatched, via war or an exile agreement.

The financials have often done well in February but that doesn't seem likely this year. IF the war ends Hussein's rein, and IF the economy recovers because of it, interest rates should begin to rise, putting the financials at a short-term disadvantage, until they've adjusted. Even the stronger stocks of regionals would be effected by the short-term dislocation when rates first rise.

Techs usually sell off in February, so that seems a seasonal bias that should revive, this year, unless we do go to war and it ends as swiftly as the most optimistic believe, in which case, the same seers foresee corporate purse strings loosening, allowing orders to flow.

Biotechs usually make their highs in January, and trade down in February, but they've been trading in a definable range you don't need a calendar to interpret.

So where does that leave us? Still waiting for Godot, still waiting for the President to stop talking war and acting on his desire, with the March 3 moonless night figuring as a potential date, which gives U.S. forces the time it needs to get the rest of it's war supplies and military personnel into place.

As for retail, I think it will, still, outperform in February, though the nature of outperformance could translate into small rises, or stocks in the sector falling less than others do. But make no mistake, February is, traditionally, one of the weakest months within the six best months of the year, that runs from November thru April. If uncertainty causes distribution, there's enough of that, now, for stocks to sell off. While I'll admit, there's a defining moment that is often credited, retrospectively, with turning a bear market into a new bull, and the end of Saddam's rein may, in fact, some day in the future be seen as that moment. Unfortunately, that moment seems destined to come in March, not February, since March 3^rd is the moonless night.

So I'll share, instead, my recollections of how recent wars have gone--including the Gulf War in 1991. They don't come in an overnight surprise attack you hear about on CNN without warning. In 1991, preparations included sealing off air space over the Capitol. Landmarks and museums, like the Lincoln Memorial and the Smithsonian,closing to visitors. Security picked up around bridges and tunnels. You'll know when war is not days but hours away.

If I told you a year ago that the main thing plaguing the markets at the end of 2002 would be when the war with Iraq would start, (already), you'd have laughed me off your computer screen. And that's both the problem with the markets and the problem predicting the markets: old issues remain while new and unanticipated ones arise--precisely why it seems more sensible to make short term predictions rather than longer term ones.

TO REVIEW: In 2002, the war in Afghanistan continued with no sign of Osama binLaden. The Perp Walk became almost as popular as freeway chases in California videotaped from circling helicopters. New York Attorney General Elliott Spitzer proved more regulating than the stock exchange regulators. Microsoft's monopolistic issues are resolved only on the Federal issue, with both civil and European challenges still ahead. Iraq became enemy number one, which made a jealous North Korea seek notoriety to surpass Hussein's. President Bush's economic team vanished into hyperspace even as the economy managed to bungee ride, posting phenomenal growth in two quarters, sandwiched around some pretty punky quarters that prove the economy is far off the path of sustained recovery, even as Bush's popularity fails to wane commensurate with the economic malaise. Economists and Wall Street analysts proved themselves no better informed, nor better prognasticators than you, me, or the drunk down the street.

I toyed with setting out some 2003 predictions but, as you may have surmised from the para above, that seems altogether silly if not insane. So don't look for the intermediate term Outlook to return this year--not gonna happen. January, however, is something else, since the calendar gets back to full complement, with the data out the 9^th and 10^th, arguably, the most important of the month. The 9^th will bring December Chain Store Sales, while the 10^th promises the December Unemployment rate which, if history is any guide, should lead to nothing but disqualifiers--no matter the direction. Every week in December we heard seasonal adjustments and oddities make the data unreliable. So what will make the Monthly report any better? That survey of households upon which the Unemployment "Rate" is derived, a function of how many people are seeking jobs, vs the jobs available? Have ya ever tried to get a supervisor in the last two weeks of the year? With the Federal extension of unemployment benefits cancelled as of Dec 28^th, whaddya think the households with serious job seekers are gonna sound like? I know you don't need paint by numbers to fill in the picture, nor do ya need me to remind you that the government's magic wand of seasonal adjustment has a way of making serious problems disappear like white-out on a typing error. Nonetheless, the market will gyrate in advance of the numbers; the talking heads will be guesstimating and, in all likelihood, the markets will hesitate in advance.

Skipped a week, you say? Not really: No one believes the pros and traders are coming back on a Thursday to start the New Year on the 2^nd. Not gonna happen. The market year will begin with the 6^th--no matter what happens during the first two trading days of the year which I'm expecting to see a let-up of the selling pressure. No, that doesn't mean big gains cause a let up in selling doesn't mean we'll see a flood of buying--the volume will stay to low for anything to make significant impact on the charts.

As for retail sales, I don't think they were either as bad as anyone fears, nor as good as anyone hopes but, given how much prices were cut, which brought the average unit price down, ANY increase in sales should translate into palatable earnings come February, something you probably need not plan for any earlier than the 28^th of January--just as I've said for some 6 years running now.

But while we're at the 28^th, let's at least mention the fact that January 27^th and 28^th have been widely sited as likely Iraqi strike dates--which means the weeks between the 10^th and the 27^th will be run by emotions, not fundamentals--despite the earnings Sweep Season that arrives starting the 14^th, with Intel's earnings. That week should also bring the President's State of the Union Address, which along with the economic plan could just bring word that bomber's started striking Iraq as the President began his speech, though that's my dramatic editorial and unlikely, since the last State of the Union was delivered before a Joint Session of Congress and it's easy to imagine that top-level security execs would think assembling all the U.S. leaders in one place when bombs started flying would be too great a risk.

The 28^th and 29^th bring another FOMC meeting--the double dip presumably to prepare the Chairman for his testimony before Congress, in February, formerly known as Humphrey-Hawkins--in the same way a certain pop performer is formerly known as the artists "Prince," since Greenspan's halo has dimmed as much as the pop icon's.

As for trade events--still the raison d'etre for this site--January looks like it has in the past--packed, with the investment conferences back to join the trade shows--absent the slew of smaller shows added in the dot.com craze. Name some ya say? Let's start with the Detroit Auto show, where the '04's start getting introduced, J.D. Powers provides an outlook, and many an investment firm has been known to host a dinner or mini-conference and/or webcast or two. How bout MacWorld, in San Francisco? The world still awaits Apple's next surprise which can come none to soon but I hear no rumors that would suggest this the winning trade it used to be. The 9^th, again, brings CES--the Consumer Electronics Show that remains closer to it' former past greatness than either Comdex or NetWorld+Interop but more evolutionary than revolutionary this year, as INTEL (again) pushes built in Wi-Fi, with Wi-Fi certain to become the evolutionary build-out that makes the internet the pervasive utility electricity now is. However small Intel's Bania's chip will allow laptops to shrink, the build-out of Wi-Fi connections is no closer than 3G but, if rumor has it correctly, is cheaper and easier to execute, which may, finally provide, the crucial technology that will make wide-spread upgrades of mobile devices the necessity it was when PC's took off alongside Microsoft's introduction of Windows 95. (Okay--so I'm projecting long-term after all. Wi-Fi will be huge--it will blanket the nation, requiring new devices--both on the provider and consumer side, by I'z not saying it's a 2003 done deal. Think more 2004 and '05, please).

If ya thought Vegas might be fun in January, consider the American Gaming Summit which starts the same days as CES, this year hosted by Deutsche Bank, after years of Bear Stearns. Again, I like the gaming area in January, as I have every year, though I don't think the whales the casinos depend on will be flocking to Vegas in January while war seems imminent. Still, with the Vegas build-out all but complete, and states still legalizing gambling to close budget gaps, the supplier side seems like a growth biz, still--whether ya go for big caps like International Game Tech or smaller, like ShuffleMaster, a name you all laughed at three years ago when I first mentioned it. (Don't deny it: I know the truth and I'm not insulted. I expect you to think for yourself--even if it means laughing at some of my "visions." from time to time.)

Some other big shows on the January schedule include Cycle World--for motorcycles, the North American Veterinary Conference, the International Housewares Show (this the granddaddy of all table top and gift shows for the year, on the 12th), BICSI, for the Telecommunications Association, Healthcare Information Systems, NAMM and MIDEM, for music, NATPE, for television programmers, and the sports SuperShow (on the 20^th). As if that weren't enough, the 21^st promises the International Builder's Show, Internepcon/Electrotest (the big Semi-equipment show), , while the 23^rd brings the PGA show (you know how CNBC loves golf), as well as LinuxWorld, in New York. Since Abbot got FDA approval for a new Rhuematoid arthritis drug in the waning hours of 2002, I'll mention the meeting of the College of Rheumatology on the 25^th, which is just the tip of the iceberg for healthcare this month. Some potentially market moving events on tap this month include Protein Week--the big, three tract biotech event, as well as JP Morgan's Healthcare conference, at one time the H&Q biotech event that sent the sector to the moon.

On the entertainment side, there's no February start to the Olympics to look forward to while the Superbowl moves back to the 26^th, after last year's February 3^rd broadcast, delayed 'cause the 2001 season was suspended shortly after the World Trade Center atrocities. Of course, the events mentioned above represent only a fraction of those that will take place, which is why Premium Members have access to the complete database. But, as ya can see, despite three straight down years, it's business as usual on Wall Street.

So now that you have the schedule--which makes it sound like business as usual in 2003, trust me when I say it isn't. Iraq and North Korea hang over the markets, with the first sorties over Iraq almost welcomed after the more than 6 months of rhetoric already endured. With Congress returning on the 6^th, charged with crafting a fiscal stimulus plan, the Supreme Court resuming it's session, with some market moving topics still to be decided, and the President's State of the Union address to be drafted and polished, it's still war in Iraq that's suppressing confidence and capital investment. While the cogniscenti seem convinced the US will start bombing before the month is over, the February 21s^t deadline for UN inspectors to report back to the United Nations makes it possible the lead up to war will be drawn out again. I haven't picked a bottom in three years and won't now--it's all trades, all rentals, until the geopolitical heat gets cooler.

And just for the record, I haven't changed my bearish stance and won't until the war with Iraq is underway and appears resolved to global benefit.