My 6-12 month forecast, FWIW, would be contrary to almost everything I believe in, but I believe it nontheless. I believe we hit new highs in the DOW, S&P, and NAZ by the end of the year. This is based on three things:
1) the markets correct now and head to cycle lows in June, S&P down to 1200 after bouncing off 1320. This correction would unwind all the speculative excesses of the runup since July 2006 and wipe out trillions in investor equity worldwide. The market correction will spill over to commodities, taking down some of the high flying base metals such as zinc and nickel. Gold and silver may stay strong initially, but show weakness May - September.
2) the Fed comes to the rescue and cuts rates near the lows, providing a base for equity markets to move to new highs by year's end. Stocks move to new highs based on rate cuts and massive monetary reflation alone, not on fundamentals. The Fed's printing presses go into overdrive. It's an absolute crime, but this is what I see happening. With oil heading over $100 this year and the coming helicopter drop, inflation shows its teeth by year's end.
3) a hunch. The charade that is the US economy will go on much longer than bears will believe. I wouldn't bet against it, but I will profit from it
Ok, that's my wild mid-term forecast on the markets. But what do I know? ;) |
