Even with the conclusion of the Iraq war, there's still the potential for strife in the Middle East, he said.
"We're getting a bounce from the distressed levels of February," said White. "We still don't know the direction of the economy. There's economic uncertainty and geopolitical uncertainty."
The S&P 500 is up 8 percent since March 11, when stocks started rallying in anticipation of a quick victory in Iraq. The index is down 3 percent since March 21 when the rally peaked.
Investors have been trying to explain the volatility. The Dow rose as much as 126 points in the first 20 minutes of trading on Friday, before drifting lower. Value Line Asset Management money manager Brad Brooks blames the prevalence of computer-assisted trading of stocks. In one type of so-called program trading, buy and sell decisions are triggered automatically by fluctuations in So-called program trading accounted for 41 percent of New York Stock Exchange volume last week, according to the last NYSE statistics, up from 19 percent three years ago.
"The average investor is holding back," said Brooks, who manages US$600 million. "And program traders are so technically oriented."
Viren Chandrasoma, Credit Suisse First Boston's director of program trading, said while a large computer-generated trade can move the market, stocks generally fall because there are few investors willing to bid prices higher. Monday and Tuesday the S&P 500 closed within two points of 880, and has closed above the milestone only once since January. While Chandrasoma doesn't subscribe to technical analysis, which involves studying trends on stock charts to predict prices, he has noted the pattern.
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