During seven of the last eight weeks, the stock market has been down. It has been a relatively steady decline, with a few stomach-wrenching days. You might use the weekend to load up on more Rolaids.
But, I think we could be approaching the bottom, because uncertainty is getting so high. In addition to the minute-by-minute unfolding of the Greek tragedy, this week will be the end of QE2, when the Treasury will have to actually start SELLING bonds to cover the deficit . . . to somebody other than the Fed. There are lots of opinions, but nobody knows what will happen.
Plus, we are fast approaching resolution of the uncertainty about the debt ceiling. While it is an unnecessarily dangerous method to deal with the budget problem simultaneously, it may have the benefit of resolving both problems simultaneously. At that point, uncertainty will be reduced enough for the stock market to function again!
If the Greek contagion is contained, if the Treasury market survives the death of QE2, if the debt ceiling is raised before the last minute, and if there is believable progress reducing the budget deficit, you can throw away the Rolaids and celebrate the return of the bull market at a Mexican restaurant! All four "ifs" are coming up in the very near future . . . finally, resolution is coming . . . party, party!
