The Balance of 2010

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With about twelve weeks left this year, it might seem odd for me to be looking toward the completion of 2010, but I just wanted to share a few random musings about what I think the rest of the year has in store (short version: not much).

Whereas 2009 was – the first few weeks notwithstanding – simply fantastic for the bulls, I think 2010 is going to be a year that bulls and bears alike are going to want to forget. While it may seem to the bears right now that the bulls have absolutely blown everyone away this year, the cold fact of the matter is that the S&P is presently up about 3%. It wasn't that many years ago that a standard passbook savings rate on money in the bank was 5.25%. How times have changed.

So here's where my head is at now regarding the rest of this year:

+ I think the likelihood of an exciting plunge down is just about nil at this point. The plummet to 925 that I had so long anticipated was satisfied by the dip to about 1000 in the middle of the summer.

+ I believe my analog is still very much in place, and that the bears are "owed" one smallish drop – probably not even 9%, if that – before autumn is over.

+ Should we get such a drop, I think a precious metals melt-up and a dollar melt-down will be in store, as well as a equity-rally-based-on-a-plunging-dollar. It'll be a pretty sad situation, although most nitwit Americans will look at the nominally higher Dow Jones and marvel at Obama's magic.

+ The election will provide some kind of inflection point; I don't think the frauds and pretense of the government are going to vanish once the election is over, but the incentive to deceive will be diminished after November 2nd.

So that's it from Jolly Ol' Timmay. I am positioned with 16 longs and 84 shorts, with about an 80% portfolio commitment. I was terribly disappointed in how today went, since it truly seemed like things would finally start to tip our way, but Shalom is committed to destroying the dollar, and the bears don't stand a real chance until a crisis emerges that can't be destroyed by a printing press.

And the prospect of that, my friends, keeps me going.