American Spirit,
What you say does make sense if nothing changes, however you do not mention interest rates.
For now I believe 5.60% as the pivot point, where the higher we get above that point the more negative the market gets, and vice-versa.
If the cyclicals are the safe haven since they are on the mend, that
is inflationary down the road.
On the issue of money flow, and this is only a guess - if Japan and other countries are really improving then money could be flowing back to those areas. Their money and domestic money. Here is something i am pondering, and Im not sure of. Japan's bear market started around 1990, where their market was at 40,000 and recently got as low as 13,000, but at the same time the U.S. market was roaring especially from 1994. How much money came from JAPAN and other weaker economies into the U.S. bond and stock market during that period. Now that
they may have bottomed they need money to rebuild their economy, so how much of what they put in during the 90's will flow back. Prior to
that, in the 70's when their auto industry/electronic industry was taking business away from us, the U.S. economy was staggering and we had a bear market, while they were chugging along. And its not just
Japan.
Is there a inverse relation with their/other weak economies with the U.S., where when they are weak we are strong, but if they become strong again ??????
seeya |
