Last weekend, we noted that the next phase of this bear market will likely be driven not by U.S. financial companies or by energy prices per se, but rather by the effects of the American slowdown being felt by the rest of the world.  A front page story in the WSJ on Friday noted the falling Eurozone GDP as additional evidence of a global slowdown.

Looking forward, we expect continued bullishness in equities next week as the lack of major news and the seasonal drop in volume draws in more hopeful investors.  But we won’t be surprised if those same buyers are punished for their optimism as the bearish tendencies of September and October kick in.  Members can check out our proprietary market sentiment indicator in our weekend portfolio update.

Performance Comparison

Here’s how the major market indexes, the S&P

...