The Pollyanna stock market is back. After a quick decline, the USequity markets reversed their downtrend and are nearing highs onceagain.

Investors are still fleeing high-beta stocks for less-volatile sectors,indicating that despite a continuing rise in the market, investors areworried about taking too much risk in their portfolios.

Meanwhile, risk-adverse investors continue to pour money into USTreasuries as the risk of a slowing economy leading to further Fedaction becomes a real possibility.

The storm in the US stock market that I have been talking about for the past few weeks may have finally arrived. After weeks of poor economic data, we are starting to see the first crack in the current euphoria in the markets.