SAN FRANCISCO -- The worm has turned on Wall Street, and it's proving to be a quick little critter.
Last Wednesday morning, I received an unsolicited call from a source who was singing a modern version of
Happy Days Are Here Again
and chatting, only half-jokingly, about
5000. Then the market reversed Wednesday afternoon, and suddenly, it seems, the bulls have been cowed and the bears emboldened.
Those emotions were reinforced this morning as stocks opened on a negative beat, taking the Nasdaq under 2000 intraday for the first time since Jan. 3, while the
Dow Jones Industrial Average
moved further away from the psychologically significant 10,000 level.
For the bulls, the question becomes: Where is the conviction? If all the talk of "new bull markets" wasn't just talk, why are so many in their ranks seemingly ready to jump ship after a few days of losses that, relative to recent history, haven't been so tremendous?
For the bears, the question is simpler: Why now? From the beginning of the market's rally off the Sept. 21 lows, the naysayers have been saying that stocks were overvalued and investors were overly optimistic about prospects for an economic recovery. Other than the significant fact that higher stock prices mean valuations have become more extended, what's different now?
Why, for instance, would a bearish source call -- unsolicited -- Friday to declare that "you've seen the highs for the year" and that "things
such as valuation and investor expectations are as silly now" as they were in March 2000?
I note these calls were unsolicited because, from a reporter's point of view, it's one thing when you call a source to ask their opinion, but it's quite another when sources become proactive because it signals they feel very strongly about what they have to say.
Tune in at the column's regularly scheduled time after the close today as -- barring some major market developments -- I'll be reviewing these issues in more detail and their implications for the market.
Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to
Aaron L. Task.