Larry, you are absolutely right, the finish was stronger than I expectyed, but the early decline extended beyond my expectation as well, the net result was the market closed just at the point my last post pointed to about 7550. Does that late breath taking rally change my opinion about Monday, not really, I actually think that bullish amunition was wasted in the last hour, and furthermore, the bear are far less bold than they are supposed to be and run for vcover to nail down some profir (for a change after few drought years).
The fear of deflation will reverberate a little longer, finally I start and see more media coverage of the potential implication of excess capacity on prices. Once the word "DEFLATION" decorates the front page of Business Week, it will be safe to assume that that danger has past as well. By then the long bond might be at 5.5% and the Dow at aound 6200, and IMHO, it will be party time again for the bull, and they will overdo it as usual, and guess what, they might even get a double from there within three to five years from the bottom.
Zeev |
