the declining dollar would actually have a negative effect on the US market as foreign investors pull their money out of the market to protect it from further dollar declines. (Assuming that the foreign investors are rational)

Therefore, when the dollar rebounds you can expect the stock market to go up considerablly as those foreign investors rush back into the market to catch the benefits of both a strengthening dollar and expanding earnings by american companies.

I think the recent run-up in stock prices is based largeely on several real and important factors that show no sign of going away: increadibly low interest rates, and real and sustained growth in the american economy, and increasing productivity, all of which are leading to better earnings (which is the most important factor where stock prices are concerned).

We will proobably see some market declines shortly after the new year begins as individuals who have put off selling their stock (for tax reasons) do so. But then I believe the market will resume its upward trend as the proceeds from those stock sales are reinvested into other stocks and more and more shorts capitulate and turn into longs.

But then if I really knew, I'd be rich.

Scott Evil