Rich Uncle,
This is just my opinion, but popular sentiment can be a very
contrarian indicator. Ralph Agampura(sp) says DOW 10K by the
end of the year, while other less certain, technical analysts are
hesitant to support that philosophy. I see it this way, there is
no reason for the fed to lower interest rates further, what would
be the point, the economy is growing at about a 2-3% rate, inflation
is non-existent, the US government has its' first monetary surplus
since the early '70's, oil prices are low, and the available labor
force is employed with unemployment somewhere in the 4% range.
This is the good news. The bad news is that US exports are starting
to decrease quarter to quarter, foreign imports are increasing
significantly Q-Q. US wages are starting to feel some upward bias
since they have been relatively stagnant for the last 5-6 years with
only cost of living/inflation compensation adjustments. This in
the face of huge corporate gains and US corporate managers getting
compensated in the millions of dollars. US stocks are very highly
priced relative to short term future earnings (<1 year) especially
some of the high tech and internet stocks. The Asian markets will
take a year or more to completely stabilize and represent several
"wild cards" that could pop up at any time to destabilize the
US/world markets, especially Japan, but that is a different topic.
My scenario/prediction is a 10-20% correction by year end in all the
major indices, possibly more if Japan tanks.
I'm off my soapbox now, just my opinion,
BB |
