The worse the US economy gets because of inflation...the higher the dollar goes! Right?
But why would anyone want to own the currency of a punk economy...?
The thinking is that if the economy is bad...the Fed will quit raising rates...and thus, stocks will rise; and the demand for the dollar will quickly follow...? Right? Or, something like that?
The Street has a way of working itself into a lather about various and often conflicting data...
Or, is it that the Fed will continue raising rates, and bonds will therefore fall, but demand for the dollar will "increase" because investors "want" the high yeild that the dollar now gives...
What ever! There is a "reason to rally" in every data point!
Still, I think it is assured that Dow 10,200 and Dow 10,600 are the outside limits for this market. In effect, the Speculators can to anything they want on any trading day,...so long as they don't violate this tight range.
But in this rising rate environment, with consumers getting punker by the minute...the markets will have to streach for every "data point" on which to base a rally...but fear not, they are up to the job!
Because, there are always perennial "brokerage upgrades" which translate into: "We have a lot of this stock to distribute, so buy it from us now!"
And today, M&A is the Queen for a Day... Indeed many companies still have their "unique currency" ...ie over-bloated, multiple expanded shares...and many of these companies are going to strike while they can--after all, 2006 will not be a good year for business in the US; and "spend it while you got it" is the way to go...
TODAY, THE MARKET MASTERS SEEM TO HAVE REGAINED CONTROL OF "THE FLOAT" AND A MARKET THAT IS BREATHLESSLY GOING NOWHERE IS BOUND TO CONTINUE...AND TOMORROW? Stay tuned....
The G-Man will do what the G-Man always does...raise by 25 "measured" BPs gauranteed! How sad that they have to be so carefull about "upsetting the markets" now....
...But alas, in American today;
SPECULTIVE FLOATATIONS OF PAPER ASSETS ARE ALL WE HAVE LEFT!
