As you know or probably have heard, the first five days of January usually sets the tone for blue chip stocks for the entire month - and the month of January usually sets the tone for those stocks for the rest of year. With that in mind, now that we have February's numbers, it is interesting to watch as the Y2K markets develop:

January 2000: Dow Jones Industrial Average and the S&P500 declined about 5% for the month, with the NASDAQ declining a little more than 3%.

February 2000: Dow Jones Industrial Average declined about 7.4 % for the month, with the S&P500 down about 2% but the NASDAQ advanced about 2%.

If January's decline was do to profit taking, what about February's decline? Not that one should let a statistical anomaly dictate their actions but there it is.

Before you panic though, it still appears that the experts see no reason for the economy not to continue its expansion over the near term. This is important because traditionally, as long as the economy is good, the stock market can be good. Sure; we are all experiencing uncharted territory in our 'new economy' but historically this means that we can all look forward to a continued increase of prosperity - Unless the Fed surprises us with a drastic move.

Our prediction is that the overall market will have a flat year or even a slight decline. That doesn't mean that there is no money to be made in this market, just that decliners might outnumber advancers for the year (at least when taken in percentage terms). Keep in mind that there is still a lot of opportunity out there as technology continues to leap forward. Stocks also do well historically during the second half of election years. And to end with an advance for the year, the market would have to make up the declines already incurred during January and February.