Although the technicals are calling for higher levels on the Dow, or at least a retest of historical highs the current levels cannot be reconciled with current US and global economic fundamentals. To me, the market is basically hooked on QE and as soon as the tap is turned off we are going to be in for a crash that makes the GFC look like an intraday correction. Given the amount of money that has been thrown at the US economy it should be jumping ahead in leaps and bounds but instead of the cheap money going into areas that will boost the economy it has been going into the equity markets.
Thie leaves the Fed in a very precarious position because even the merest hint at an end to the flow of cheap money is going to send negative shockwaves through the market…imagine the tidal wave that will hit when an end date is in sight.
Call me Mr doom and gloom but i think time will see me proven correct…it might not happen this year and the dow may well trade above 15,000 in the mean time, but it will happen.
