2/19/03
I still believe that before the Dow breaks thru 7200 (7197 was the actual low) there will be a rally - the last gasp rally. If I am wrong, when the Dow breaks 7200, it will go straight to 6600 then 6000. The Nasdaq would have a similar result, breaking its October 2002 low as well down to 1000.

The only really positive company situation recently announced was Dell, with sales up over 25% and earnings up over 35%. Unfortunately this is not suggesting healthy results for the computer industry, everyone else is on a downward slope.

It appears to me that the real estate market has stalled - as I have already stated - and we are now heading lower. In most markets the high end properties (1 million and above) are already down over 20% - this includes South Florida, New York City, San Francisico, Silicon Valley and most already high-end markets. Next in rotation will be $500,000 properties, then $250,000, then basically all real estate will be lower. As with stocks there may be a few properties unaffected, but I am not smart enough to pick which few.

The Dollar continues its decline, yet 30 year and 10 year bond yields have been declining. At some time soon this has to reverse. At that point there will be rising yields in 10 and 30 year Treasuries. But in the short run, short term Treasuries will be unaffected.

Gold is still dropping, so far by $35 per ounce from the high. Gold should hold $340 per ounce. Buy Gold stocks - NEM, ABX, AU & BGO on this decline.


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- posted by Arnold @ Wednesday, February 19, 2003