Since March 12 when stocks bottomed out, the economic data has been horrific. The war is over and the earnings season is nearing its end. The marketplace has ignored the data for the past 6 weeks, HOPING for a rebound in consumer spending. The traders can no longer afford to ignore the data. If you have lost your job, or there is a FEAR of losing your job, there is no money to spend. Two years of bad news, two years of FEAR have taken its toll. FEAR WILL REIGN Here are the FEARFUL FACTS. 1. The job front is not good. The weekly jobless claims do not lie. They are consistently over 400k, with the previous weeks revised to 461. 2. In Florida, Cypress Gardens, open since 1936 has gone out of business, stating that since 9/11, attendance has decreased. 3. New and Existing Home Sales are down dramatically from a year ago. New York City apartment sales were down in the 1st quarter, citing a reversal from a sellers market to a buyers market. 4. I spoke with a soccer mom last night. Her husband installs sheet metal. He has not had a day off in 14 years. He is working 3 days a week and grateful for that. They are very worried. Like so many working class heroâs, their only asset is their home. 5. My electrician friend is still on 4 days a week, down from 6 days a week a year ago, but up from 3 days a week last month. 6. In this fragile economy, it is very difficult to find a new job that will pay the same amount of money as the old job. When you work for less, you will spend less. The unmanipulated laws of nature will prevail. Less demand will create more supply, and prices will fall. The old nemesis DEFLATION will be the talk of the street soon. 7. Fortunately, the FEAR of WEST NILE VIRUS will not take hold until the end of June. 8. The media has spread the FEAR of SARS through America. Restaurants in New York and Chicagoâs Chinatown districts are empty and failing. Only the moon is further away from the USA than China, but paranoia and the FEAR of SARS has taken hold in America. 9. SARS has consumed a whole region as in the Far East, a whole country as in China and a whole city as in Toronto. What region, country or city is the next economic disaster waiting to happen? Lack of media attention in China has caused this outbreak. Nowadays, the media is all over this story, pen in hand, waiting to take down another region, country, or city. 10. SARS will be the straw that broke the camels back. I first wrote about it on March 18 stating, âThe few bits and pieces I have read about this new strain of pneumonia/influenza are not as bad as once thought. Only eight have died since last Friday. Two of those were Canadian and the other four members of their family have contracted the disease. In a weeks time we will have a better idea of the actual repercussions to this problem. If this problem persists worldwide, you can kiss the travel and tourism industries good-bye.â SEVEN WEEKS LATER, 6,000 SARS cases worldwide and 460 have died from it. I have kept track of the numbers so far. Week 1 03-11/03-18 8 deaths Week 2 03-18/03-25 16 deaths Week 3 03-25/04-02 32 deaths Week 4 04-02/04-09 64 deaths Week 5 04-09/04/16 128 deaths Week 6 04-16/04-23 256 deaths Week 7 04-23/04-30 512 deaths Notice the pattern? The pattern has only over-estimated by 52. FEAR WILL REIGN FEAR IS NOT GOOD FOR STOCKS Do not underestimate the power of the BEAR. The Bear can undo 2 months of hard work in two weeks. This three-year trend will remain your friend. Look to buy all breaks in the securities markets and sell all rallies in the equities markets. It is going to get ugly soon. Patience and Discipline.