There are two factors suppressing short-term market prices. The war in Iraq has not gone as well as expected and the cost of crude oil is pressuring transportation costs as well as some retail prices. Taken together, they are causing consumer sentiment to plummet.

For the longer-term, several other factors are also providing a drag on the economy. They include a still-too-valued dollar, a declining money supply and interest rates at 40-year lows. Jittery investors are not buying stocks. Also, there is considerably more competition for the stock market dollar.

Low interest rates have savaged fixed-income investors. The majority of these investors are retirees, many of whom are living on a survival budget. Their diminishing disposable income has and will continue to pressure our economy.

To see the extent of the slowdown in our nation's monetary growth, check the St. Louis Federal Reserve's March 20, 2003 U.S. Financial Data publication's Money to Zero Maturity chart. Note that our nation's money supply has slowed dramatically, starting last November. Since the beginning of February, it has stagnated. Was it simply a coincidence that the October 2002 rally started to slow as the money supply moved to lower growth levels? Except for brief rallies, the stock market has continued to correct since November.

The Federal Open Market Committee (FOMC) had to deal with the criss cross of conflicting economic conditions at its March meeting. No wonder the meeting ended in an unusual fashion. The meeting concluded with what many Fed observers described as a cryptic comment.

To quote, "In light of the unusually large uncertainties including the geopolitical situation in the short-run and their apparent effects on economic decision-making, the Committee does not believe it can usefully characterize the current balance of risks with respect to the prospects for its growth. Rather, the Committee decided to refrain from making that determination until some of those uncertainties abate. In the current circumstances, heightened surveillance is particularly informative."

Translation: You see a lot by simply looking.

The Fed faces the same problems it faced in March. Very little has changed and it may be worse. In its comments, I heard the Fed to say that lowering interest rates at this time could do more harm than good. So until the next FOMC meeting May 6, it's wait-and-see-what-happens.

If the picture turns clearer, the Fed may take action before May 6. The Fed has stated it will lower rates if necessary in April without a meeting. This inaction leaves the market, investors, consumers and Alan Greenspan on the sidelines, awaiting a clearer picture.

As you can see, Fed monetary policy is at a crucial juncture. Inaction could push the economy lower. Another cut in interest rates could start another round of dollar devaluation, thus price increases. We are at that point in dollar value where prices will start to rise.

In the meantime, my Pro Picks portfolio remains invested 50% in stocks and 50% cash. The market's current strong sectors are biotechnology, independent oil and gas, crude oil refining and marketing, and gold and silver stocks.