Bearshark, it is interesting how many call this trap a rally and return to a bull market.
A recent reminder is the SE Asia situation, last year every one was in the thinking that by now SE Asia will be back on it's feet and the market rallied in Jan/April period - the rest is history.
Japan lowered their interest rate to almost ZERO and the stock market is still around 13,000 after a high of 36,000 to 37,000. Our stock market went up strongly with rising fed funds from 3% in 1993, to 5.5% more recently.
I see this unusual rate cut and it's timing more as a manipulative move than anything else. Were are in an acute manufacturing overcapacity, with low buying power in over 2/3 of the world.
Closing down factories is very un-popular and governments will keep them running at a loss. See what hapen in Russia and China for example - they were forced ot operate loosing enterprises. The same happens in the rest of the world without to much publicity.
Fundamental issues can not be solved in a few months time even more national sentiment.Aside from the economic outlook, I think the smarter part of the investors will start bailing out into this rally and not as before poring more money into the stock market as before, it will be more measured and lower levels. IMHO.
In the US the "BIG MONEY" wants the market up. Their pension fund contribution will be lower and increase profit (fantom profits).
People will be merrier an spend more this X mas season, so no real gloom for retailers. All in all we are living more and more on borrowed time. As to the stock markets??
Those so called "long term" investor better cash out, you got a present.
Short term traders we will correct some and again rally a few days. The health of the market will depend on earnings which are weak.
If no other rate cut will be by mid November or the CRB will prove it formeda base, the market and treasuries will slide downwards.
BWDIK |
