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An explanation herein, with the use of our trusty histograms.

Earnings are rebounding strongly. S&P operating earnings estimates are up 21% from 2001 to 2002, and up 23% from 2002 and 2003. Severe cost cutting may not be fully factored into analyst estimates. Look for upside earning surprise.

VLT Momentum, a long term technical measure, recorded buy signals on S&P 500 and DJIA. This is a very reliable indicator.

YTD instances of High Volatility (50%) is still well above the 2000-2001 levels. It is, in fact, the highest volatility reading since 1938, and the fifth highest since 1900.

High Yield bond only fixed income area strongly appealing to us, currently.

Technology stocks soar again as our broad tech index gained 26.4% in November.

Just buy and hold good blue chip stocks? …..No growth is permanent.

Continued positive economic data. Q3 GDP up 3.1%. Initial unemployment claims trending down. Capex is rising. Group leadership in early stages of recovery: big initial Tech and Telecom bounce from the October 9th low, but will it be sustained?

Important pillars of economic bridge until Capex kicks in and business confidence improves. Interest only mortgages-the ticking time bomb debt. U.S. Consumer debt OK compared with other countries but, what happens when interest rates rise?

We applauded S&P for developing a standardized approach which adjusts GAAP earnings for several problem accounting areas and produces a better representation of “True” earnings.

It’s possible that valuations could ultimately fall to their “ultra cheap” levels, with P/E ratios around 10x earnings. However, it is more typical for bear markets to bottom around the median P/E levels of 16.0x.

The Leuthold Group is not currently “Playing The Bounce,” but may do so in December, depending on market conditions.

October’s weekly fund flow was interesting to watch because it really confirmed that Main Street’s investing patterns in past bear markets could be repeating in the latest cycle, at least so far.

October's reading the most volatile in the S&P 500 since 1938 and fifth highest over the entire history of this work.

Latest 10-week reading of 0.29% remains in the normal range of net selling territory.

Short interest was actually up 1.1%, but a 16% surge in average daily volume accounted for the short interest ratio decline.

At the beginning of October, the Home Improvement Retail group rose to Attractive based on our GS Scoring System. With the November calculation, this group got even more Attractive.

The stock market rallied in October, with large cap growth stocks leading the way.

We believe it is an opportune time to add to High Yield positions. The economy is improving and corporate profits are rebounding from depressed levels.

This month’s feature was written by Don Weeden, still a Maverick and Innovator! Named one of the fifty most significant people in the securities business since 1950. “…...The world’s premier market center remains dangerously exposed. A move to Westchester won’t diminish the danger.”