5/25/04
Hi,

The Dow and the NASDAQ continue to look weak to me. the NAS & Dow are both down by well over 5% and I still believe that Dow 9000 is the first stop and NASDAQ 1500 is quite realistic.

Gold has dropped to the $380s.. The price action in Gold seems to suggest the lows are in, but there still is a possibility of $350 - 360 per ounce for a final blow-off low. We will have to wait and see.

Interest rates have risen by 125 basis points (1 1/4%) - and now rates have fallen back somewhat. Rates will consolidate, then head higher again. The year-end rates should be 5 1/2% for 10 year.

The economy by all appearances is strong, yet it still does not feel to me as though the economy is as strong as it appears. Short term interest rates need to climb by at least 300 basis points (3%) in order to be at the minimum rates (based upon 2 1/2 inflation rate + 1 1/2 risk factor).

Arnold

Copyright 2004 Arnold's Ramblings Inc., All Rights Reserved.
- posted by Arnold @ Tuesday, May 25, 2004