Fork in the road

Would you believe that the Dow is within 60 points of its all-time high? Today's close of 11,669.60 is just shy of the record 11,722.98 on Jan. 14, 2000 - before a lot of bad stuff went down. Wall Street, as could be expected, was in prime guessing game mode. Are stocks peaking or on their way to never-before-seen heights? The WSJ's Marketbeat column notes that the recent gains have involved mostly large-cap issues.

According to Citigroup, on a scale from 1 to 100, with 100 representing a 52-week high, the Russell 2000 only merits a 66, putting it at two-thirds of its high reached in the past year; the Nasdaq-100 is at a 64, and the S&P MidCap 400 is at a 55, which suggests the advance isn't a broad one. Data from the Commodities & Futures Trading Commission on trader commitments also suggest that a turn could be in the works, as large speculators were long 33,670 S&P 500 futures as of last week -- a 52-week high -- which is often a harbinger of a shift in the market.

Local stocks, which are largely made up of small to mid-sized companies, provided further evidence of this large-cap rally. Aside from Activision (up 5.49 percent) and Napster (up almost 12 percent but most on takeover talk), most L.A.-area companies were very tame today. Confusing matters is the current bond rally. When bond prices rise, yields fall. And lower interest rates should be good for stocks - even with a sour housing market. So, in other words, who knows?