Marc, actually there is a source of liquidity on which the fed have very little control, and that is the liberalization of the Japanese Postal system, I calculated once that if only 2% of these funds finds their way to worlds' market, a bolus of $200 billion annually, of excess liquidity will be created. This combined with electioneering will prevent a major retrenchment, IMHO, next year (or at least until Autumn). Having said that, the current move, will be halted very shortly (sometime before the start of February, IMHO), and my reasoning is that bull markets rarely continue unabated for long after three tightening moves by the fed, and comes the first week of February we will have the fourth such move in place. Because of the excess liquidity, I doubt that will initiate a real bear market, but I could easily see the NAZ getting back to the 3000 to 3200 area before the next summer rally begins. After that, I think that frolicking will return.
Zeev |
