Marc Faber: Euro Oversold, If S&P Above 1150 Could See 20% Correction

Marc Faber was on Bloomberg in Hong Kong giving detailed thoughts on the market. He writes the Gloom Boom Doom Report.  I quoted the segment for those with Youtube blocked. He gives his thoughts on the market, Euro and US Dollar.
Market: "I'm not so sure that we'll make new highs but if we make a new high above 1,150, I don't think it will be that far above the 1,150 level, maybe 1,200, and that thereafter we have a bigger kind of correction on the downside.  I think if we make a new high then I wouldn't rule out a correction of at least around 20% and don't forget many shares in America and globally have already corrected 20%, so for them to make a new high isn't going to be all that easy in the first place. So what we could see is a new high in the S&P and the Dow Jones that is not confirmed by the new high list. In other words you will make a new high with fewer stocks making a new high than in January."

Currencies:  Euro: "Now the Euro is very oversold and the news has been horrible. Everything you've read has been a disaster for the Eurozone and I think the Euro now can rebound to around 1.40 before it goes lower. I think there's nothing good about the US Dollar, but I don't think there is much good about the Euro either..."

US Dollar: "When investors realize that the fiscal deficits aren't going to come down, that they'll stay very high. When they also see that one state after another is essentially bust like California and Illinois. And when they see that monetization will become inevitable in the long run, I think at that point the Dollar will be weak. But don't forget it may not necessarily have to be weak against the Euro.  Both currencies are sick and so both could go down and then ultimately you just have one or two sound currencies, notably precious metals and I think the Asian currencies will then probably also appreciate against the Euro and the US Dollar but notably precious metals will then be strong".

Asset Class Right Now:  "Right now as of today I would probably go long the Euro and probably be long US Treasury Bonds but only as a trade for the next say 5-10 days and then we'll have to see further.  In general, I would say better be in stocks than in bonds because we'll get more inflation in due course".

[Courtesy of BloombergTV on Youtube]
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