Friday, February 22nd, 2008:  UPDATE ON THE STOCK MARKET.

Wednesday stocks rose, yesterday they fell, giving back all of Wednesday’s gains and a bit more.  Call it backing and filling as the stock market continues to calm down a little.  Still the background economic news, which ultimately drives stock prices, continues to worsen.  Yesterday stocks just couldn’t overcome the much weaker-than-expected, -24 vs. the expected -10, drop in the February Philadelphia Federal Reserve Factory Index.  As I’m prone to say:  “It’s always something during a bear market.”  I started calling this decline a bear market back in early November as the “overwhelming” evidence indicated to me such although to this point the key Dow Industrials and professional’s benchmark index, the S&P 500, still haven’t fallen the requisite -20% off the top to be officially called a bear.  Still the Nasdaq has been down over 20% as has the S&P 600 Small Cap indices here in he US and 45 other global stock indices around the globe have fallen over 20%.  Right now, or since heavy capitulation selling on January 22^nd, just before the Fed’s surprise, emergency rate cut, we’ve been bouncing back up.  Although we’re now a touch higher, it’s been hard to find many stocks going up.  Schwartz View:  During bear markets stocks go down quickly and sharply, much faster than stocks rise during a bull market.  Then stocks take a breather, treading water or bouncing a little.  Investors would love to have the pain over with asap, but bear markets need time to work off the underlying economic problems and these economic adjustments take time.  The economy moves a lot slower than stocks move.  Bottom line I believe today we’re in one of those periods where stocks kill time before the next downward leg.