6/9/03
Hi,

The Dow has closed above 9000 and traded intraday over 9200. I still do not see any way the Dow will close over 9200 (more than 2 consecutive days). Should this happen, this would suggest the market has switched from a bear market to a bull market. How this can happen is beyond me!

Never in history - going back over 200 years - has the market bottomed at PE ratios of plus 30. Never in history have we had this kind of optimism near a bottom. Never in history did a bear market end without a "the world is coming to an end" scenario. We shall see.

Gold is meandering in the $360 range and the gold stocks are holding on a tight range.

Short term rates should probably drop as the Fed(eral Reserve) drops rates at the June or August meeting. Long term rates should start to rise as the dollar continues to sink.

The Fed - and Greenspan's own - assertions of the Fed's buying long Treasuries as a way to fight deflation will actually create inflation - at some point in the next two to three years we should have a major league inflation scare.

As a reminder: For all of you who are passing Arnold's Ramblings on to friends, family members, enemies - whoever, now you can provide them a fresh copy, direct from the source! Ask them to go to http://www.arnoldsramblings.com/NavLinks/Subscribe.html.

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- posted by Arnold @ Monday, June 09, 2003