hi energyplay,
Well, "predicting" the longer term of market performance is certainly becoming more difficult than "prognosticating" the shorter term, that's for sure... <g>
Everything I look at right now, sans fundamentals, says the markets are heading upwards. Some charts might be read as to indicate the Dow to go as high as 9300 - 9700. The big wall to cross would be Dow 10,000... And remember, the fundamentals definitely do not support this rise, a "fact" bolstered by all of the current insider selling. Yet, up we go, apparently...
Smaller stocks look even better than the large caps. A combination of low interest rates, a decreasing dollar making USA products relatively cheaper abroad, a lack of pricing power by retailers and wholesalers alike, some apparent demand, tons of liquidity, soon-to-be in circulation what-would-have-been tax monies and an explosion of foreign capital looking for either investments or spending bargains almost guarantee the near term rise in US equities. At least for the short term, it appears that the phrase "Don't fight the Fed" may be back in vogue.
The dollar should get nowhere near 1.55 Euros, as the ECB will most certainly be forced to take action long before that, perhaps at the 1.20 - 1.22 Euro range. If the ECB were to fail to act, political uncertainty and civil strife would most certainly occur in France, Germany, Spain, Italy and The Netherlands, and Great Britain would once again take another look at the Euro. As Germany, France, and Spain account for the overwhelming majority of European GDP, there is almost no doubt that the ECB would intervene somewhere short of absolute calamity to prevent the Eurozone from financially falling apart at the seams.
Gold should rise no more against the dollar than the dollar falls against the other world currencies. If one looks at the performance of gold, as measured in dollars, gold appears to have really appreciated in value. But if one uses Euros or some other currencies to value gold, then the price of gold has hardly budged at all. So, for the time being anyway, gold is merely reflecting the decreased value of the dollar, its official unit of measurement, rather than having actually increased in value on its own uses.
I agree with your porcelain throne analogy, quite good actually...
KJC |
