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Buddy, Can You Spare a Market Pullback?

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Some investors would like to go shopping, but it seems that the end of the year will not offer many opportunities for bargains.

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You can't keep a good market down, as the Dow (INDEXDJX:.DJI), S&P 500 (INDEXSP:.INX), and Nasdaq (INDEXNASDAQ:.IXIC) have made clear of late. The us stock indices are about to put up a seriously strong month of October. So much for its reputation as the crash month or the second worst month of the year. October 2013 came in and is going out feelin' hot, hot, hot, thereby leaving the too-much-cash-in-my-portfolio crowd feelin' not, not, not.

So is it clear sailing through the end of the year? Man, if it were only that easy. The Wall continues to come down in small, incremental steps, but at 20 worries, there is still enough angst out there to support more market ups. That said, it has been a while since we've had a pullback, let alone a correction. Will we get one? Looks like only the money inflows know, and save two weeks in September, they have been as positively charged as Ben Franklin's kite key.

As earnings season comes to a close, the end-of-the-year performance-chasing season begins. Add to that the rumblings I've heard about retail thinking we are finally in a bull market (it only took five years to identify it), and it appears that the next two months may bring holiday spirit that we haven't seen in quite a while.

Nevertheless, there are plenty of investors among us who could use a little pullback to do some shopping.

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: I'm waiting for the markets to create a taper derivative to bet on. Sigh.

UNEMPLOYMENT: "All I need is a miracle, all I need is you…" to add 200,000-plus jobs per month.

US ECONOMY: Dreaming of 3%-plus US GDP growth in 2014. I said dreaming.

INVESTOR SENTIMENT: Stock market approval rate his risen…to a slightly higher level than that of Congress.

EUROPEAN ECONOMY: Will an expensive currency, 1.37 euro to the US dollar, derail its nascent economic recovery? Only the Draghi knows…

VOLATILITY: Cries of, "Buddy, can you spare a pullback," from the too-much-cash-on-the-sidelines crowd.

HIGH FREQUENCY TRADING:
Lloyd: How's this low-volume environment treating you?
HAL: Thinking about getting a dog.
Lloyd: That bad?
HAL: Maybe two of them.

CHINA: If you think it's butter but it's not, it's Shibor (China's interbank lending rate)… and its crept back up to 4.5%.

GLOBAL ECONOMY: Ready to rock in 2014! (Or roll, if the US and China step in it again.)

DATA DELUGE:
Still playing catch-up. Should be done by the time the next government shutdown starts.

BONDS: Buy 'em? Sell 'em? Hold 'em to maturity? Yes, the third choice is an option.

EARNINGS SEASON: Almost done. See you in December for pre-announcement season.

CONGRESS:
Their latest crisis upset the apple cart but didn't really move the markets. Perhaps this crying wolf's tears have dried up?

CONSUMER CONFIDENCE: Down on its knees, crawling around, trying to find its mouthpiece.

RETAIL SPENDING: "Let it snow, let it snow, let it snow…" Sure could use some cold weather for Retail Land.

DEBT CEILING: A near miss in the US. That's gonna leave a mark.

SEQUESTER II: The "everybody loses" path is most likely the one we take again in January.

EMERGING MARKETS: Uh, which countries make up the "emerging" group again?

US GOVERNMENT SHUTDOWN:
All in Washington, DC, promise this will not happen again. Politicians make promises. Cold comfort.

FED CHAIR ELECT: Mark your calendars! The confirmation hearing-slash-brawl-slash-whingefest likely starts the week of November 4.

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No positions in stocks mentioned.
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