Mike, the "minimelt down" according the turnips is in Autumn, in the September/October time frame. The summer rally came on time (it was supposed to start between the 15 to the 24 of June and it did early in that period). The networkers and the internet crazies did indeed have a major move together with "dometsic" and financials of all kind. The rally is still on course. I expect a "fake out" new high on the DOW before any serious correction. My bottom downside risk is still at 8250 or so. After the minimelt, the thesis of liquidity, according to same turnips, will reestablish itself. I see a lot of bearish torments here, but note that the NAZ, The S&P and the Wilshire 5000 are already breaching new highs. The long bonds has also breached a new high and the Dow transportation will probably follow, IMHO.
All this hand wringing here is a very nice contrary wall of worry to climb over. Early next year we may be looking at 10,000 on the DOW and we may blink again.
As for the EURO, I have yet to see a major reallignement of currencies not accompanied by major dislocations. The EURO might be the death nail of the bull markets in Europe with our market finally succumbing last. As a matter of fact, I would not be surprised to see the EURO actually fail. It depends a lot on European nations' willingness to give up national sovereignty. I do not see the EURO as a strong contender to the dollar for some time. As far as currencies goes, after another push to new lows (I have something in the range of 150 to 156 yen/dollar), the yen will slowly strengthen as Japan finally and agonizingly slowly regain some economic balance. They have to or the pacific rim plunges into a lengthy depression, which I do not think will happen.
Zeev |
