I'm cautiously optimistic about the stock market, yet I just can't get too enthusiastic about the market's prospects over the near term. It must be experience, but I don't like the way the S&P 500 Index or Dow Jones Industrial Average charts look. The NASDAQ is hanging in there not too badly, but the main, large-cap indices just don't look healthy to me.

So, this means that it's going to be a difficult time for the stock market going forward. I'm not suggesting that investors not invest in new opportunities in this environment, only that there isn't likely to be a major tailwind from the broader market to help investors out. There isn't anything we can do about it. This is the reality of the marketplace.

The equity market is always good, however, at betting on the future. Right now, investors are worried about a slowing economy, inflation, credit availability, and interest rates. It's my forecast that, very soon, the stock market will look beyond the slowing economy and focus its attention on another issue. I'm not sure yet what this issue might be. I hope it's a positive catalyst.

A lot of investors railed against the Federal Reserve for not dropping the Fed Funds rate half a percentage point. I'm of the belief that the central bank's monetary policy is just about right. The commodity price cycle is still in full swing and inflation is still a concern, despite what some analysts are saying.

Further to the point, the Federal Reserve shouldn't be in the business of bailing out the stock market all the time. The financial industry engineered, marketed, and made billions from selling subprime mortgages to a lot of people who couldn't afford them. It isn't the central bank's job to fix this mess. The economy has to be given a chance to right itself and, commensurately, so does the stock market. The Federal Reserve shouldn't be asked to be in the business of creating equilibrium in the marketplace. Price stability and market liquidity are just the right tools for the long-run health of the economy. As for the rest, only time can right the situation.