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[prytania3]

I think the move, which I said was going to begin on Nov. 2 is going to be up--to at least 1100, if not higher. So what if there's no fundamental reason for it--that's where it's going.

[parispundit]

Yay!

[prytania3]

Dow is +140 on the basis of retail.

[mad_doctor]

Gold is over 1100 on account of a further-weakening Dollar.

So, do you think the Dow is overpriced, prytania?

[prytania3]

Gold is over 1100 on account of a further-weakening Dollar.

So, do you think the Dow is overpriced, prytania?

Totally. I think it's a speculation run, but I do think we're on another run to at least 1100.

The dollar is just a fiasco, and I'm afraid its weakness tells the real story.

[parispundit]

Unless you are planning to follow in my footsteps and return to the Old Continent, you should be happy about the dollar. You want a positive balance of trade, more manufacturing jobs, etc., etc.? Then you need the dollar where it is or better yet 10% weaker a year from now. Worried about the collapse of the US govt debt market? Relax, a greater US savings rate will help take of it, and the Chinese are too smart to lose all their savings anyway.

Meanwhile, a little recovery in the 401k should help people feel better about spending, which will also help the US economy in the short run.

[mad_doctor]

I understand what you're saying, parispundit re: exports.  When the Dollar declines exports will increase, and make opportunities for manufacturing.  First of all, I just don't believe that sucking the life blood out of the Dollar is the best solution for this economy.  Secondly, we haven't been a dominantly manufacturing economy for some time now, so I'm not sure how much we can benefit from increased ability to export.  The Chinese (and the rest of the world) will look out for themselves.  They are already talking about replacing the Dollar as a global reserve currency.

You may be right that consumer spending will increase if 401Ks get a boost, but as you say, that will only be short-lived.

[prytania3]

I think the move, which I said was going to begin on Nov. 2 is going to be up--to at least 1100, if not higher. So what if there's no fundamental reason for it--that's where it's going.

I said the move would begin on Nov 2. It actually began on Oct 30 (Friday), so I was one market day off. (That's why I'm the Foracle.) So far it's up over 300 points since then. I still stick with Dow 1100. There should be some profit taking tomorrow, but with this wacky market, you never know.

[parispundit]

Since you are the Foracle, as an historian I must be the après-oracle. Or Hindsight-'R-Us. Or something.

[prytania3]

So Robert Prechter says it's time to get off the gravy train and prepare for a 2010 crash.

I still say we go to 1100 first. From there I'll have to reevaluate.

[mad_doctor]

Did he just now make this prediction?  What took him so long, I wonder?  My personal belief is that anybody who's in the market is taking a huge risk.  As I mentioned in another thread, the PE ratio of the S&P 500 has been in the 130 - 150 zone.  This is unsustainable, and a correction must happen.  I think the Dow could hit in the 4000 - 5000 range, as unbelievable as it sounds.  But hey, it was at 6000 and change just a few months ago, so why not 4000?

BTW, gold is over 1100 and still trending upward.

[prytania3]

Did he just now make this prediction?  What took him so long, I wonder?  My personal belief is that anybody who's in the market is taking a huge risk.  As I mentioned in another thread, the PE ratio of the S&P 500 has been in the 130 - 150 zone.  This is unsustainable, and a correction must happen.  I think the Dow could hit in the 4000 - 5000 range, as unbelievable as it sounds.  But hey, it was at 6000 and change just a few months ago, so why not 4000?

BTW, gold is over 1100 and still trending upward.

Today. This is the news page from Google.

http://news.google.com/news?sourceid=navclient&rlz=1T4GGLG_enUS313US313&q=prechter&um=1&ie=UTF-8&sa=N&hl=en&tab=wn

He also says the dollar is going to rise in 2010, which I said previously,.

[mad_doctor]

He really is quite a contrarian, isn't he?  I have been thinking about the Dollar and gold a lot lately.  I suppose a short-lived Dollar rally is possible, but I would see it as only a short-term event.  I can even understand his reasoning about creditors wanting Dollar-denominated securities to shore up their balance sheets - kinda like a manager wants to move his nearly-obsolete inventory before moving forward with the next big thing.  I just don't see anything but trouble for the Dollar in the long term.

[prytania3]

He really is quite a contrarian, isn't he?  I have been thinking about the Dollar and gold a lot lately.  I suppose a short-lived Dollar rally is possible, but I would see it as only a short-term event.  I can even understand his reasoning about creditors wanting Dollar-denominated securities to shore up their balance sheets - kinda like a manager wants to move his nearly-obsolete inventory before moving forward with the next big thing.  I just don't see anything but trouble for the Dollar in the long term.

I'm sorry. I said he made this particular pronouncement today. It was on Nov 5, and I was thinking today was the 5th. Crazy me. Anyway, Prechter has been right about a lot of things, but he was early on his call on the dollar and gold. Anyway, I used to get his newsletter and for weekly and daily calls, it's not so hot. It's better to listen for when Prechter makes a public announcement like last week.


I like your inventory analogy. It makes a lot of sense.

[mad_doctor]

Thanks for the kind words and for the heads-up on Prechter.