Market sluggishness --- some cautionary observations

The equity markets have been kind since September and are now in a low volume holding pattern. Oil prices, inflation concerns, consumer spending outlook dimming, international concerns continue, all of these are subsumed by the outlook for corporate earnings. If there is any dent in that armor, we're in for a sell-off.

There may not be a problem. Cisco's John Chambers and his moribund Goliath have taken media atttention away from the generally solid corporate earnings picture and the multinational firms, be they large cap, mid cap, or even small cap, that benefit on the margin from export growth and indigenous operations in growing emerging economies.

Right now, as in the last few days, we have begun to see sell-offs in names that have had huge gains over the last eight months, profit taking to protect those gains and gird portfolios for a decline. There are stocks followed here that have seen significant declines in the last few days on no news, that's nothing new, just the kind of mid caps that are favorites here and have left plenty to harvest in recent months if an investor is so inclined.

We could even be in for a "sell on the news" market decline, when good earnings reports create enough liquidity for major institutions to take some money off of the table at decent prices, rather than waiting for a summer slumber.

Then again, what we have been seeing is that money must go somewhere and have some expectation of a return, so a good earnings season could underscore the value of equities, certainly relative to any outlook for bonds and certainly a possible value for foreign investors given the recent weakness of the dollar.

---just meandering through market thoughts---