Toward the end of 2004, when the Dow Industrials touched a bullish tripwire at 10542, we raised our long-term target to 13045. This very important Hidden Pivot resistance has always seemed as good a place as any for bears to get short aggressively and dig in their heels. But when the blue chip average dove in early March after hitting record highs 250 points shy of our target, we thought the opportunity had expired. Now we’re not so sure, since the Indoos have once again wafted into thin air and are within easy striking distance of new all-time highs. Once there, a further push to the target would probably take no more than two or three days. And then? Well, we’d probably “go away in May,” as the adage goes, hoping the summer of 2007 turns out to be just as blissfully dull as the last four summers.

But it’s hard to believe a do-nothing summer is in the cards, given the rapidly metastasizing threat of a full-blown estate collapse in the U.S. Not that that prospect seems to have troubled Wall Street recently.  Don’t blame the money managers for being out of touch, though. They’ve had such an unbelievable run of good fortune in the last few years that, probably, the only kind of fear that keeps them awake at night is the fear that a deal to buy some Westchester County mansion for twice what the last owner paid for it will fall through.

Anyway, we can be sure that Carl Icahn, Sam Zell and their ilk have not made their fortunes by being risk-adverse. To the contrary, Zell in particular, by buying a couple of big-city newspapers, seems to have bought into the “Zimbabwe factor,” which implies that, in the investment world, too much of a bad thing is sometimes not nearly enough.  As reported here recently, the Zimbabwe stock market is the hottest in the world, notwithstanding the fact the country’s economy is the pits, its government so irredeemably corrupt as to make even  Putin’s Russia look like a model of honesty and civic virtue.  If the Zimbabwe stock market can boom in such adversity, imagine what the U.S. stock market might be capable of in a Zimbabwe-like economic trough.  If the experience of the 1930s is any guide, our worries about Fed tightening would be banished for at least a generation.

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Online Seminar April 21-22

There are still a couple of seats left for the online Hidden Pivot Seminar on April 21-22, Saturday and Sunday morning, and for the May 19-20 class. To find out more about this opportunity to learn to forecast as accurately as top pros, click here. You can also go directly to the registration page by clicking here, then on the “Upcoming” tab.