One of the advantages of this rumor though, is that it has caused the weakened dollar to appreciate in value. According to a Bloomberg.com article posted today:

The dollar increased 0.9 percent to $1.5393 against the euro at 1:48 p.m. in New York, from $1.5532 yesterday. It has risen 3.9 percent versus the 15-nation currency since April 22, when the dollar sank to a record low of $1.6019. The dollar was up 0.3 percent to 105.13 yen, from 104.77. The euro fell 0.5 percent to 161.86 yen, from 162.71.

So, would this be a good time to speculate on the dollar?

I went to the experts to find an answer on whether or not the dollar would “stand or fall”? Specifically, I wanted to know if it’s time to speculate on the dollar or is it still a “euro theatre”? They played around with it for a while, presented it to their people, and came back with the following answer:

So, then I asked them, “How can you be so sure, after all the Fed’s not going to lower rates again, right?” After looking into things a little closer, they came back with the following response:

Okay, so that sounds reasonable enough.

So then I asked them: “Would I be better off moving back into the stock market now or leaving my money in cash, where I’m basically getting a ZERO percent return?”A wrong decision could leave me in a real Fixx.

So, I took their advice.. a good decision after today’s market action.

I won’t repost results that you can find elsewhere, but suffice it to say, the market really made a comeback in spite of worsening economic data. Here’s a list of some good places to follow weekly market results:

• Briefing.com: Weekly Wrap
• Vanguard.com: Economic Week in Review
• CNBC.com, By The Numbers: Market 360

There’s an old adage that says the market usually turns around before the economy. A lot of folks are now saying that all the bad news has already been factored in, and that the market has bottomed-out. Well, I’m a little skeptical. I still think that the market’s in for more bad news and lower price levels. Corporate profits are going to be hit hard soon, and profits are what drives stock prices. Let’s see if the PPT can manipulate that.

But, don’t just take my word for it. Listen in to what Standard & Poor’s Equity Research has forecast for the remainder of the year and decide for yourself:

Earnings Outlook: Rebound or Repeat? (mp3 audio)

So, I’m still waiting on the sidelines, 100% of my retirement holdings invested in cash. Only time will tell if I’ll be left behind, or if my continued patience eventually pays off.

I’ve noticed a strange calmness this week and maybe that has something to do with it. Of course I’m not sure, but I think that we’ve reached a point where everyone has just taken a wait-and-see approach, but have our fingers on the trigger to either jump in or out in a moments notice.

I believe Charles Kirk seems to have described it best in his report today.

The so-called smart money is decidedly neutral - neither bullish as they were last summer and far from as bearish as they were when the market bottomed out back in 2003.

It’s a continuation of what NBER’s Martin Feldstein stated a couple of weeks ago when he reported:

The current situation has the elements of a Catch-22: The credit flows needed for economic expansion require confidence in the values of existing financial assets, but market participants may not have such confidence while the risk of recession hangs over us.

Both the bulls and the bears have reached a stalemate, or a point of indecision. It’s a fight, a battle of wills, and both sides refuse to give in.

So, to get a clearer picture of what’s happening, I asked another expert what he sees ahead for this fight. I tend to agree with his prediction.

When things get desperate, one will try to put a positive spin on just about anything. How did Wall Street react today to Warren Buffett’s offer, which likely won’t materialize? Just watch.

Not only is Valerie looking great, but so is my market-timing adventure. After returning back into the red during last week’s amazing bounce, I’m back in black after today and yesterday’s equally-volatile plunge. While I’m sure there will be some continued volatility, the trend is bearish and I don’t think things are going to turn around anytime soon.

It also looks like many investors are realizing that we already are in a recession. Today’s alarming ISM Report may have convinced even some of the perma-bulls who’ve been living in denial concerning economic conditions. However, there are still those who want more evidence before capitulating.

An Associated Press article sums up things in a more enlightening format. An excerpt from that article reads:

“The ISM report is particularly alarming, said Bernard Baumohl, managing director of the Economic Outlook Group LLC. Because Americans will not pare back spending significantly on necessary services like health care and transportation, January’s rapid decline in service sector activity suggests that investors may have underestimated how damaged the economy is, he wrote in a research note.”

I tend to agree with that statement, but remember, I’m just a guy with an opinion. Let’s see where the market leads us for the rest of the week.