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Major Conflicts Too Prevalent Around the World, Economic Forecasting

By Administrator ~ July 29th, 2014

Hi,

 

The world has so much conflict - Israel and Hamas, Russia and Ukraine are the two major conflicts that we hear about daily, but there are many more throughout the world. While arnold is not a philosopher (as all of his regular readers know), clearly something must be happening around the world that makes these armed encounters so prevalent. Clearly arnold has no idea what that is, but there does not appear to be any way (in the short term) to reduce these events and most likely there will be more, not less of them. What can we do? That is the question, but arnold has no good answer.

 

This issue of Arnold's Ramblings will have an expanded market forecasting section:

 

The DJIA is having difficulty staying above 17000. While we could still see 17200 or even somewhat higher, it looks to be the top at this point unless we bolt (like lightening) to 17800 or higher (and soon). If this forecast is right, then by year end we will start to see a significant drop in the DJIA which should end with a low below the 2009 low of 6500 plus or minus before the end of 2016 or early 2017.

Gold still may rise to $1450 to $1550, but it looks less and less likely. Then we will see gold drop to at least $700 the ounce.

Oil could reach $120, but that is also doubtful. When oil begins its correction it will drop to at least $60 a barrel.

Interest rates are still in a tight trading range and should start to rise by year end. The 10 year Treasury may reach 4% or so.

The dollar has risen some in the past few weeks and should start a sustained rise by year end to early next year.

Real estate pricing is clearly topping now in most markets. Sales are down, listing are up and over half of the listing are sporting "reduced". The real estate market will probably drop about 40% to 50% from these levels, but many markets will be more and many markets will be less. The average for the United States will be 40% to 50%.

The economy continues to look weak to me. We are probably looking at the last one to three quarters that are possibly positive.

 

Arnold

 

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