Wednesday, April 14, 2010

When Will Fed Put on Brakes???

Stock markets soared today breaking though 1200 on S&P and 11,100 on the Dow. Interest rates (10-year) bumped up moderately but I believe this is going to be the key. Long term analysis of the 10-year trend indicates that this rate could rise to 4.5% but perhaps not until the end of 2011. Until the Federal Reserve finally admits that there is real strength in the market, stocks will continue to rise. Probably also until the end of 2011. With this in mind, and considering the Dow's current trend. Dow Industrial levels could break as high as 13,000.

As long as the Fed says they are on hold, you've got to go with this madness. But the results following this rally will be disasterous. When you feel wonderful about the market, it's probably time to sell. But this feeling is not likely to take hold for another year.

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