IMO AG is going to continue to raise rates until this economy slows down, albeit in incremental steps of 25 basis points each. If one looks at the 30-year bond charts, it is clearly pointing to 7%-7.25% easily this year, and 7.5% could also be on the horizon. Will that be enough to stop this bull run and put in an intermediate top - anyone's guess. There is a lady guest commentator (wish I could remember her name) who is a "bond consultant" that frequents CNBC every 2 weeks or so. Her calls on the 30-year bond have been uncanny and dead-on accurate for the last year or so. She is looking for at least 7% and higher shortly. I personally think the current environment gives much leeway for the Fed to raise rates without impunity, i.e., without damaging the economy. That said, the stock market could still take a serious hit without damaging the long-term bull trend. I'm not sure if anyone else thinks it is normal for the Naz to go up & down in 100 point moves on a daily basis. Whether the "new paradigm" has kicked into full force, whether there is overdone speculation/day-trading, or whether there is significant distribution in Naz shares at these levels is anyone's guess. I believe the latter is happening and have recently reduced my exposure except for my core holdings, QCOM being one of them. I am waiting for better entry prices on stocks that I want to add to my core holdings. That said, the market could run away from me from here. If that is the case, so be it. I won't chase it but I won't let go of my existing core holdings no matter what. Core holdings are just that - LTB&H to be tucked away under a mattress for the next 5-10 years. IMO, QCOM should rise into earnings (I don't know to what price level) and then do its after earnings report swoon as more distribution takes place "after the news." Of course, this could change if some "significant" new events are announced by QCOM, then QCOM is off to the races again to challenge and surpass its highs.
jmanvegas |
