The Big Kahuana Draws Near
As has been posted, linked and discussed many times on this thread, the over-valued U.S. Stock and Bond Markets and the under-valued POG are more a function of a strong dollar by G7 intervention (beginning in '95) and (more recently) a safe haven for foreigners with currency woes at home. As in '29 and '87, these markets will not crash until the dollar weakens significantly.
It does seem to me that the events that will cause the dollar to slide are near.
o The Euro will be more clearly defined in May, this will weaken the dollar even if temporarily as dollar support turns into dollar selling.
o Hillary's impending indictment - not a good thing for the dollar
o Ken Starr's Grand Jury wraps it up early May; I believe his report which is probably mostly written already, will be devastating as it outlines strong evidence of perhaps up to a dozen serious high crimes and misdemeanors committed by Bill Clinton et al.
o Congress will be like the proverbial deer in the headlights, forget about an IMF bailout. If you think the political scene in Washington is ugly now, you ain't seen nothin' yet.
Markets don't crash from the peak, most usually they have already dropped 10%-15% before the bottom falls out. Both the '29 crash and '87 crash occurred on a Monday, after an ugly Friday, 55 days (a fibonacci palindrome) after the peak and while the dollar was in decline.
If the April 21 high holds thru June, then history suggests:
o The dollar will be in decline, and the POG will rise (340-350??)
o The DOW will have to decline to below about 8000, while volatility increases
o Friday, June 12th the DOW loses 300 ... 400 ... 500 points
o Monday, June 15th (55 days from 4/21) the bottom falls out of the stock market as greed turns to fear and fear to panic
This is more a plausible scenario and food for thought, than a prediction ... however if it all plays out this way ... you heard it here first.
When the US markets do crash ... the world will follow. Has anybody looked at a chart of Spain's market lately? Up about 45% since Jan. 1
Did anyone notice Amazon-dot-COM the other day??? Up almost $13.00 on a better than expected earnings report! Seems they only LOST .40 per share rather than the .65 the analysts were expecting. Is this a Mania or what???
Saturday May 2nd - The Kentucky Derby
forget Favorite Trick or Indian whatever, they will be lucky to finish.
Old Trieste to win
Exacta box with Artax
and use Yarrow Brae, Hallory Hunter and Hanuman Highway to fill out the tri
That was a prediction.
As the Chinese like to say ... May you live in interesting times.
Good luck to all.
P is for politics
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