There's no doubt about it, the Dow Jones Industrial Average has put on a pretty impressive performance since around the middle of the year.

Not only has the Dow hit record highs a number of times over the past few weeks, it did so at a time when stocks usually head south. September and October have traditionally been the two worst months of the year for the stock market (See my column of Sept. 5).

Since November tends to be the month that attracts investors back into the market, will history repeat itself this time around, or are stocks overbought and ripe for a correction?

I'll leave this to those who profess to be market mavens to prognosticate. But from an economist's perspective, there are a number of ghosts lurking in the shadows that could scare the bejesus out of the equities market.

Let's begin with oil prices. Their stunning decline since August has energized the economy, but they could easily shoot back up again if new tensions arise in the oil-exporting areas of the world. A cold winter would only add fuel to this fire.

Our soaring trade deficit could cause the dollar to tumble if foreigners should suddenly decide that they have more dollars than they want. This would push interest rates higher and boost inflation as well.

Speaking of rates, the Federal Reserve, which has been dropping hints that it is more concerned about inflation than it is about growth, could surprise the markets by tightening money another notch in order to move inflation down toward its desired range.

This alone would be anathema to stocks. But it could also be the straw that breaks the back of the housing market, which would rattle equities as well. A collapse in residential real estate would depress consumer spending, which makes up more than two-thirds of the economy, and push unemployment higher.

This would slow economic growth even further, which, as you might imagine, would not be good news for corporate profits. Come to think of it, the markets might not cotton to a pickup in growth, either, for it could lead to more inflation, as I opined last week.

For its part, the budget deficit, which lately has been coming down, could rise, either because of more spending, reduced tax revenues -- or both. Again, this would lead to higher interest rates as Washington peddles more Treasurys to finance its widening budget gap.

And if the Republicans retain control of Congress after next week's elections, this could disappoint some players who are rooting for gridlock.

Finally, in the words of erstwhile Fed head Alan Greenspan nearly 10 years ago, "...how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions...?"

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