This month’s wall:

Don’t fall in love with stocks, they say, but after a month like October, it’s tough not to develop a crush. The bulk of the earnings season is behind us, and the market is heading into the last stretch of 2006 with good momentum. The Wall drops for a second straight month, stopping at ten blocks and teetering on the verge of single digits. Now is a good time to start lining up overvalued candidates for profit-taking.

The worries

1. U.S. economy: Goldilocks returneth? Perhaps. Then again, in at least one variation of the story, the fair-haired girl is devoured by the bears.

2. Interest rates: In an uneasy holding pattern — like a Canada goose over a half-frozen lake.

3. Inflation: The good news: Though it’s running high, it remains only a tad outside the Fed’s comfort zone. The bad news: Bernanke is counting on a merciless slowdown in housing to rein it in.

4. Oil prices: Short of an embargo, they will continue to churn like a GOP incumbent’s stomach. The market hates uncertainty more than anything.

5. Consumer spending: As the holidays begin, all eyes are on America’s 300 million. Will they spend or stint? Ping me when it’s over.

6. Housing prices: Not dropping precipitously, but see No. 3.

7. Iran: Let’s hope this burgeoning Middle Eastern superpower doesn’t feel the need to ratchet up its military action in a play for more street cred, à la North Korea.

8. Corporate earnings: We are heading into the fifth year of economic recovery, but the fear that peak earnings are behind us has investors more nervous than a Detroit Lions fan on Thanksgiving Day.

9. Volatility: Unlucky stocks are getting walloped with the delivery of company-specific bad news. Harder to get used to than those pegged suit pants that are back in vogue.

10. Stock option pricing: Ah, the successful marriage of fraud and free enterprise. It makes you perversely nostalgic for the junk-crazed 1980s.

Looking ahead

North Korea: They got it, they flaunted it — let’s hope they don’t sell it.

Iraq: The real question is, Have we overstayed the course?

U.S. Congress: If the Dems gain control of the new Congress, what they will do, undo or investigate is anyone’s guess.

Unemployment: That the automobile industry is systematically laying off the state of Michigan at the same time the nation’s construction sector goes on sabbatical is cause for concern.

this month’s wall:

The verdict is not yet in: June gave us either one heck of a correction or the start of a bear market. The Wall rises for the second straight month as the three-way tug-of-war between inflation, interest rates and an unpredictable economy continues to create a whole lot of uncertainty for the markets. Despite the violent rally at the end of the month, stocks are getting cheaper as multiples contract, but we’re not exactly looking at a flood of bargains at this point.

The worries

1. U.S. economy: If it’s so good, why do we all feel so bad?

2. Interest rates: Coordinated global credit tightening is squeezing

liquidity out of the financial markets. Bye-bye, punch bowl.

3. Inflation: The Fed promises a fight to the death, and it may be more than jawboning.

4. Oil prices: Decomposed dino-saurs, a.k.a. fossil fuels, are once again taking the blame for the world’s many ills.

5. Consumer spending: If we’re workin’, we’re spendin’, but our monthly nut is bigger, so there are fewer extra goodies for now. Bummer.

6. Housing prices: Can a bubble deflate? Unfortunately, we may be about to find out. P.S. Rents are going up.

7. Iran: Playing its cards masterfully, but if oil prices drop, look for a quick cash-out.

8. Corporate earnings: Paranoia will destroy ya. Good numbers may not be good enough, and bad numbers could prove ruinous.

9. U.S. dollar: Much maligned. Maybe its new PR team, Paulson-Bernanke, can help.

10. Volatility: Itchy trigger fingers are ready to pull out fast, as a “the-bear-ain’t-gonna-get-me-this-time” attitude takes hold.

11. Emerging markets: Buy the dips... or are the dips buying?

12. Stock option pricing: The scandal du jour has the potential to trap more companies in its web than any other to date.

Looking ahead

Stagflation: Economic purgatory.

Hurricane season: It will be the most closely watched in U.S. history. ESPN coverage is not out of the question.

Trade deficit: No one’s buying our new stuff, so we’ll just keep selling them the old. Now on the block: Route 66, opening bid $2 billion. Deal or no deal?

North Korea: Wants attention, needs money. A global payoff should suffice.

Midterm elections: Let the mudslinging begin!