Bring on the bad news.
It seems to this observer that the more bad news we get the higher the DOW goes.
So bring on the bad news!!
I read online, that UBS, you may have seen their ads of TV. You know the ones I am talking about "YOU AND US" just wrote off 3.41 BILLION dollars in sub prime loans and the market rallies over 200 points as I am writing this.
I guess removing the B out of UBS to US stands for the Billions they lost in the sub prime debacle. For sure heads will roll at UBS as banks HATE to lose money.
Who likes to lose ... nobody!
O.K. here's another one coming up ... Merrill Lynch.
It is also rumored that Merrill Lynch could be writing off as much as 4 Billion dollars! Does that mean the market will go up another 200 points.
So far this year the Dow Jones Industrial Average is up 11% and the NASDAQ Composite Index up 12%. Now we subtract the decline of the dollar and put that into the equation and we come up a 4.85% for the Dow and 5.85 for the NASDAQ. Not bad but hardly stellar.
While many commodities are priced in USD dollars, think crude oil and gold, the world in general is benefitting from the US's "strong dollar policy" as parroted by U.S. Treasury Secretary, Hank Paulson.
Can you imagine if the US ever had an official weak dollar policy ... heck. the DOW would be at 20,000 in a New York minute.
With further declines in the dollar likely, we expect that the US stock market to remain resilient in the near-term.
One thought, do you recall the lyrics from that famous Blood, Sweat, & Tears song that came out in 1969, SPINNING WHEEL.
Here is the first few lines of the song.
Spinning wheel got to go 'round (full drum kit enters)
Talking 'bout your troubles it's a crying sin
Ride a painted pony let the Spinning wheel spin
Just something to think about.
Sometimes the market can be Blood, Sweat, & Tears, but not right now. We are not there yet, but it will happen, it always does.