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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Fiscally Conservative who wrote (383691)4/7/2009 7:59:15 AM
From: Real Man1 Recommendation  Read Replies (1) of 436258
 
Good question. My guess is we are due for a rally to 200 MA
in this bear market. Then again, I did expect a recovery
in 2009 and am still expecting it. My scenario is in the
head of USD crisis thread (optimistic one).

The expectation is based on the well known fact that mucho
printing that now goes under a polite name of quantitative
easing is well known in economics to cause recoveries.

I do expect a weak recovery and
a bull trap, but strong enough to cause a significant
interim bull move. I expect the recovery will be killed
by inflationary forces. As assets rally, debt pressures
will be alleviated. The credit crisis has passed last Fall,
and the credit market has been improving. Follow the Fed.

The only real danger in this market that can choke the
recovery is the T-bond bubble collapse against the Fed.
It's a Black Swan type event with unknown timing.

As the globe follows US into recovery, the dollar will
drop to new lows again, but the best guess is not yet.
First US has to recover, then the World. As the global
growth outpaces US growth, the dollar will drop. A conventional
answer that seemed to work in the past.

As to what causes the stock market rally? The answer: join
the party, Ben is paying... Just look at Zimbabwe industrials.
Different speed, but the same basic underlying principle. <G>
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