From the Eye of a Hurricane -- It's Sunny in Here!

The stock market has gained substantially in the past three days (The Dow has gained 475 points or 3.4%). A member of the CNBC staff remarked today how "sunny" it feels today, and asked, "Wasn't it just a day or two ago that it was all doom and gloom?" My anxiety is growing.

It's not that I have anything invested in the stock market. I wouldn't touch it with a ten foot pole right now. It's the tension of a rubber band being pulled to a snapping point-- again.

What has not yet been realized, I suppose, is the change of the framework that the market exists in. While the configuration for years has been one to reward greed, the opposite meta-mood is now in place. Instead of a cautious, slow attempt back up, the market is zooming up at breakneck speed after recent large losses. The speculators jumped right in to scoop up the "cheap stocks" and the market is again back in overshoot. While this may have been a smart move many times in the past, at this moment of market transition it may prove far less well-advised.

As mentioned in the forecast for August (http://dr-cari.blogspot.com/2007/09/fear-ahead-us-markets-and-mood-august.html), the mood configuration for this week (and last) is "climax." Although the market movements last week were quite dramatic, it didn't have a "grand finale" type of touch to it. After a climax, there is a lowering of energy. This week so far, the energy has been extremely high. It looks like we are currently building toward a climax-- a peaking of energy. Whether this grand finale occurs tomorrow, Friday, or Monday, I'm not sure, but it is most assuredly right around the corner. It may not mean a serious market crash to new lows, but given the gains of the past few days, it could be a very large one day loss. The less cautious could get serously hurt.

Yes, it is sunny in the eye of a hurricane, even a category 5. That doesn't mean the storm is over. You lay low because the other side is about to hit.

I've got a good seat, some popcorn, and a coke. I can't wait to see how this episode ends.