6/18/03
Now that the Dow has closed over 9200 for two consecutive days, the next stop is 10,000. The NASDAQ should not exceed 1800 - certainly not 2000.

I am personally concerned that the Dow and NASDAQ, but the Dow in particular have come much too far much too fast. It makes no sense to me (not that it has to make sense to me). The market does what it wants, when it wants. If we rally to 10,000 and then drop back below 9200 again in the short-term (which is the only logical possibility), then that would re-confirm a bear market, technically and then we would go back to 6000 and below.

What I find particularly disturbing is that this entire rise is all hype. There are no positive economic numbers, just hope and potential. My view is that now that the Dow has closed over 9200 for 2 consecutive days more, the Dow will move towards 10,000, then at the peak of euphoria, reverse down and break through 9200 on the downside and move towards 6000 or less. But anything is possible.

Gold is still holding between 350 and 370 and the gold stocks are still in a tight range, but during the decline from 370 to 350s, the gold stocks have held. Further, gold has not fallen much in the face of a rising Dow. That would be favorable for gold and gold stocks.

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.

Copyright 2003 Arnold's Ramblings Inc., All Rights Reserved.
- posted by Arnold @ Wednesday, June 18, 2003

 
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.

Copyright 2003 Arnold's Ramblings Inc., All Rights Reserved.
- posted by Arnold @ Monday, June 09, 2003