Oct. 17: The Flip-Flop Market

This market can't make up its mind.

Tuesday it was terrible early on, but then
changed direction and erased a 25-point
NASDAQ loss. Wednesday started great,
but then collapsed, with a NASDAQ 25-point
gain turning into a 5-point loss. And on
Friday, after a quiet morning, the NASDAQ
suddenly woke up with a 25-point afternoon
rally, before once again reversing course
and giving back half of it.

After all that, the week ended pretty much
in the same place it had started. Flip-flops
are like that, a lot of spinning of the wheels
but little progress.

Just because the market flip-flops, though,
is no reason to call it a Kerry market. Flip-flops
are par for the course in the stock market.

But if Kerry should be elected president and
the market then performed badly, that market
might become known as the Kerry market.

When JFK (the real one) was president, the
market went through a prolonged slump, and
many held him responsible. In time, though,
the market recovered handsomely. When
JFK then brought up the market's strength
at a press conference, he noted, with his
customary wit, that his critics didn't seem to
be calling it the Kennedy market any longer.

JFK had lowered taxes and was entitled to
claim credit for a strong economy. Kerry, on
the other hand, may try to increase taxes if
he's elected. If he succeeds, he might so
damage the economy that the market would
languish throughout his presidency. It might
then be known as the Kerry market for quite
a long time.

On the other hand, Clinton raised taxes and
still got a bull market. You never know.

Returns for Week Ended October 15

Gilder Technology Index (GTI): - 0.2%
Nasdaq Composite Index (NSD): - 0.4%
S&P 500 Index (S&P): - 1.2%