Apocalypse Now!

The market has undoubtly taken the upside, and a strong and vigorous sprout is blooming. It will take time, but it will flower. When I say the market here I refer to the S&P 500 index and the index is booming. It’s like looking at a rocket launch: few seconds after the start it is at few dozens meters from the ground, pushing madly. Can you imagine in that moment where the satellite will be in a few minutes, hundreds of kilometres away?

Where will the market be in 4, 10 weeks? and in 12 months? Let me think… higher?

What I can say now is that the growth will be incredible! We are looking at a large scale common interest in parking money in dollars and this shifts part of this money into the market. A self breeding device has been activated: more value, more people interested, more money, index rises and next Christmas you will be eating your hat because you did not buy in July, afraid of any news and ticks. As the dollar evaluates, more money will be attracted into the US stock market, seen as more solid than government bonds. If FED hikes, more money into the dollar and toward US markets. If FED lowers, well, you know, market booms.

Uncertainty in Europe will push money into dollar. as well. Market will get mad. We will be stoned , I promise. Imagine the S&P 500 at 2400:  all the financial world would enter climax; then after few months we will arrive at 2600 and then 2700. Time for  Apocalypse, a world wide progression will flood the market with money: rising dollar + rising market = 2 gains with one shot. With the index at 3000 madness will rule. A vision from Bosch:1024px-Mad_meg

Someone will say: “This time is different” and this will induce us to open the most fantastic short of our lives.

The appreciation of the dollar will be crucial. Probably the dollar may sustain a 20% evaluation against euro or yen, but beyond that level an internal recession may be critical. A dollar too strong will push US economy in recession, with the rest of the world in a very fragile configuration.



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