A Much Needed Cleanout
It would appear that the S&P 500 is headed for the 1070 level by the middle of October.
This all started in 2009 when Obama settled for a stimulus light, trying to make peace with the Republicans and blue dog Democrats. Then we had QE 2 that was a boon for Wall Street and the speculators but didn’t help out Main Street. Finally we saw the “shut down the Government” debacle engineered by the Tea Party and the Republicans. Now we have the Republicans whose main goal is to get rid of Obama rather than fix employment. Maybe we can call this the perfect storm or maybe we can view it as a cumulation stage of a “Big Wake UP Call” In either case Bernanke has set off a much needed cleanout, a cleanout of both thinking and a cleanout of speculative funds.
I think our comments of the past two days are spot on especially as to parameters when we will start buying stocks.