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US Stocks: With Little to Worry About, Some People Get Worried


When the wall (of worry) comes tumblin' down, it's time to remember what major issues still haunt investors.

Wall comes down, market goes up; that's how it's supposed to work with our Wall of Worry, and that's how it's been going down. The Wall hasn't been this low in a long, long time. That doesn't mean it can't go lower -- it can and probably will. What it does mean is that stocks likely aren't cheap at the moment. Not exactly a major news flash, I know.

So where to now that the Dow (INDEXDJX:.DJI) cracked 16,000 and the S&P 500 (INDEXSP:.INX) pushed through 1,800? The Nasdaq (INDEXNASDAQ:.IXIC) is working to get back to its old 5,200+ record and the Nikkei (INDEXNIKKEI:NI225) is less than halfway to its old peak of 39,000+.

Oh, if it were only as easy as marking a spot on a chart and drawing a line.

We may just in be for an old-fashioned seasonally calm stock market at the end of the year. Of course that sentiment in itself is causing unease among the investing glitterati. With little to worry about, some people get worried. We can surely fall into that camp at times, but our take is that at 17 worries on the Wall, the all-clear siren has not been sounded just yet.

We still have the Godzillas and Gameras like QE, the US Economy, Unemployment, and the perennial High-Frequency Trading on our minds. Maybe we market-watchers should just enjoy the ride for the time being -- you know, stop sweating it and enjoy making money the easy way as sometimes this is what the market gods offer?


Here's a quick look at the worries facing stock market investors. Click on the image below for an interactive version of this week's Wall of Worry, or scroll down for the text-only version and an explanation of how the Wall works.

QE: Santa Fed leaving a lump of taper coal under the Christmas tree? Hard to imagine.

UNEMPLOYMENT: What's the difference what the rate is? No one believes the government numbers anyway.

US ECONOMY: It's punky now but next year…which will morph into the second half of next year. And so on.

INVESTOR SENTIMENT: Will 16,000 on the Dow Jones Industrial Average turn the herd in a positive direction?

EUROPEAN ECONOMY: To devalue the euro or not to devalue the euro? That is the question. Throw in "how" and "when" as well.

VOLATILITY: Showing up in single stocks and the emotional stability of fund managers more than in the averages.

Lloyd: Thanksgiving plans?
HAL: Food, football, fan the flames for a weak Black Friday that freaks out the markets.
Lloyd: Same 'ol.
HAL: Same 'ol.

CHINA: Bad loans building up in its banks. That was about as hard to predict as Chinese consumers adopting fast food and the Internet.

GLOBAL ECONOMY: It's still a US- and China-dependent world. Ergo, we continue to worry about it.

BONDS: Back to nice, calm, placid seas, but keep the rogue-wave watch going 24/7 just in case.

EARNINGS SEASON: Earnings, eh. Guidance, eh. Reaction, hell yeah!

CONSUMER CONFIDENCE: Someone better cheer up the US consumer before Black Friday, Cyber Monday, and Free-for-All December.

RETAIL SPENDING: Can $3 gasoline and 40% off sales spur some shopping? Man, I hope that turns out to be a rhetorical question.

CONGRESS: First, do no harm...please. Then, do something!

SEQUESTER II: Yet another pothole that Congress will hit. Truth be told, it will probably be aiming for it.

EMERGING MARKETS: The good news is that expectations are low. The bad news is that they could go lower.

ECB: Putting a modern eurozone spin on an old FDR maxim: We have only just begun to cut!

What Is Lloyd's Wall of Worry?

by Lloyd Khaner

Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money

Typically the term "wall of worry" refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.

This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."

In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.
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No positions in stocks mentioned.
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