Replies to post #110087 on ajtj99's Market Pulse

[ajtj99]

Thanks, chainik.

As for the next bubble, historically they're not that common. We've seen quite a few the past decade, and I think we need to go without one for a while just to bring things back to a statistical norm.

I traded in 1999, and this is nothing like that. I used to flip IPO's during lunch in 1999 and make 10-20% in an hour. This is nothing like that.

In 1999 nearly everything was going up. Monkeys throwing darts for longs were becoming multi-millionaires. The current rally is getting extremely narrow. Think of it as a pyramid, with the base at 2002 and the top right around this time period.

I think to take the NDX/COMP higher in November/December they may need to take GOOG up to $800, MSFT to 42, CSCO to 36.00, AAPL above $200, INTC to $30, and a few other smaller ones like RIMM, FSLR, ISRG, and GRMN will need to continue momentum moves. Bios would need to go higher to negate the SOX drag, continuing the yin-yang relationship they have had.

While that would also help the S&P, the Dow will need to rise on the heels of stuff like GE, XOM, BA, UTX, PG, CAT, IBM, INTC, and MSFT. It can be done, but it's getting harder and harder with the narrowing breadth and the drag from the financials and transports.

On another note, if what I anticipate happens in 2008, the so-called Sovereign Wealth Funds are going to regret the day they ever considered buying equities. I think it will push back that thinking about a decade.

I think the pullback in credit and the aversion to risk will create an environment that is not hospitable to bubbles. A big bank like Citicorp blowing up would go a long ways towards making banks a bit more cautious for the next 5-7 years. Some banks look like they'll test 1998 lows next year.

I imagine the next big bubble may have something to do with food, water, or energy, as supplies of all three seem to be lagging global needs.

I'm looking for emerging markets to correct 60-65% in 2008. All assets except t-bills should drop in 2008 (industrial metals, precious metals, stocks, art, collectibles, real estate, etc). We'll see if it works out that way.