S&P500 will hit 700 in 10 months or sooner.

Insiders and institutionals selling leaves only the suckers in ; nothing new here . It might take as little as 2 months or as many as 10 but we are going to go down to 700 on the S&P . And when it comes down the door wont be large enough for all to get out at the same time ; the old movie will play out again .

1. The stimulus/bailouts made by the government hasn’t really trickeled into the economy as it is essentially reallocated taxpayers’ money. This is not to say that there isn’t quantitative easing, and I do believe that inflation will come down the road inevitably when they have to use this money (currently on the sideline) to fund the government’s projects: war, health care, social security, etc.

2. The interest rate will likely rise from 0% in 2010 despite what politicians say. This obviously doesnt bode well for stocks.

3. No significant real recovery in the private sector yet. The government is making the economic issue even worse rather than resolvig the issue. Artificial spending is non-productive and is deviating further from the free market concept.

4. People and institutions are continuing to spend on credit, which reinforces how we got into this mess in the 1st place (too much leverage)

5. Obama doesn’t get re-elected

- DL

Related Posts:

• Go long the dollar and the yen even though they’re ‘terribly flawed’.
• Fed study puts ideal interest rate at -5%
• There is a huge risk of double dip recession is the government is not careful.
• All time historic highs for % of population on food stamps.
• More than half of the people with a job today depend on Government for their paycheck.

Leave a comment