Some caveats first:
- The 24 billion we saw leave MM at the AMG site was most likely tax related stuff and possibly explains the peculiarities of the mutual fund flows in Dec.
- The 3 billion going into mutual funds reflects a resumption of the BTD mentality that has been so successful for the individual investor.
- No surprises like a "flight to the EURO" (may not be possible for several years, as I understand it). Or a Gore-gate.
From my studies, the best I can tell is that 2 weeks ago, based on VGY, the markets broke out of their consolidation pattern and started another leg up. I see nothing to stop that.
What I believe will happen will be that a feeding frenzy will start and by options expiration, we may be AT LEAST 1,000 points higher on the DOW together with all the rest of the averages moving in lock-step.
And if that DOES happen, and the inverted H&S on DOW gets resolved to the upside, we could be as high as 11,400 by the end of Jan, not withstanding my forecast of a peak of 10,400 for the year.
But after that, LOOK OUT!!! Greenspan will have to step in and boost interest rates and that, as the say, is all she wrote!
Bill |
