Archie... I'll take a stab... The strength of the economy numbers are declining, showing that the economy is indeed slowing, which is great since this will ease inflationary pressures. This means the feds prior moves are taking effect, and not only will no further rate increases be necessary, but the next move is to EASE ===> Lower rates great for stocks, which will discount this good news before the rates are actually eased ===> Rally continues UNTIL rate decreasing occurs. We'll deal with the reduced earnings expectations from a slowing economy later(4th quarter).
And of course the prices paid #'s are still rising, meaning the inflationary fever has not been broken yet. So, how will investors hedge against inflation? Gold??? NO.... Bonds??? Maybe.... Stocks??? Absolutely, as stocks have always been the best method for hedging against inflation.
There may be holes in these arguments, but as you know, ANYTHING can be used to justify a rally. <g>
I'm short term cautious until we take out this week's highs next week, and I'll be looking to take some profits on stocks next Wednesday. Sold some index longs into today's strength, but I could be buying those back by the end of the day, or next week if and when we take out this week's highs. |
