Sideways Is Bears' Best Bet

"The economy is still cooking along," says Margie Patel, portfolio manager at Pioneer Investments, which has $6 billion in investments. "You can think of bad things that might happen, but here and now, it is hard to name any very negative thing that could derail the economy or the markets here or around the world."

From her assessment of earnings conference calls, Patel concludes that companies are bullish about the economy, despite several much-publicized profit warnings. But for a mention of a month or weakness here or there in the fourth quarter, most executives were continuing to pass through high energy and raw materials prices from earlier in 2006 -- and that is bullish on the economy, she says.

On why companies are not as optimistic as they've been on future earnings, Patel quips: "With Sarbanes-Oxley, you'd be crazy to be optimistic. It's much better to soft-pedal without blowing up your stock."

Perhaps traders will be hungrier Tuesday, with speeches planned from Fed Chairman Ben Bernanke, Chicago Federal Reserve President Michael Moskow and San Francisco Fed President Janet Yellen. After the close, tech bellwether Cisco (CSCO) reports.

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