with election year, I think Dow 7200 holds
but if crude oil prices touch $40, then Dow goes lower
tough call
I still think the dollar-longbond relationship is key here
the Fed is fuching with it heavily
without higher longbond yield (and shortend yield also), there exists no internal mechanism to stop the dollar decline
THIS IS THE FED'S ACHILLES HEEL
by controlling longbond yields, they are attempting to prevent the real estate recession which would have huge economic implications, BUT THEY RISK A DOLLAR FREEFALL
I say "freefall" loosely
since spring 2002, I regard what we have as a slowmotion freefall
just a semantics issue
with stocks, bonds, dollar, gold, I try to employ geological eyes
now that I have sworn off shorterm disastrous trading (which has nailed one friend recently)
all the talk about Iraqi tensions affecting the dollar, gold, and stock indexes is extremely amusing and distracting to the real issues
- the dollar is still 20-25% overvalued
- gold is still at least 50-75% undervalued
- S&P is still 50% overvalued
we can blame the mess on Iraq, corporate scandals, and WTC attack
what can we blame our economic morass next?
how about FAILED KEYNESIAN MONETARISM ??????????
I can see it now...
New York Times and Wall Street Journal announce the failure of 50 years of Keynesian policies coupled with Monetary approaches
they suggest the USA repeal all debts and pull a Mulligan
/ jim |
