One Big Positive Ahead, But...

The biggest net positive I can see for the market is the upcoming Republican convention. Bush will look like a winner (as all political candidates usually do during their conventions) and the market will likely be pleased. The problem is that we have a number of cracks in the foundation for higher stock prices at the moment. I, for one, think we're going to see a number of negative preannnouncements in September that will confirm the economic "soft patch." For example, yesterday's news that Wal-mart (WMT) is not seeing a bang-up back to school season provides yet another clue that the economy isn't on terra firma. Still, the short window of opportunity, between now and the start of September, should provide some room for portfolio readjustments headed into the most dangerous time of year for the market. This is especially true if oil somehow manages to fall below the $40 area in the weeks ahead.