3rd Quarter GDP to be the "Eye of the Storm"

I am making a call right now, but before i do lets lay down the foundation. We have seen some short-term positive effects of the stimulus packages, the stock market has recently broke the 10,000 barrier, and the VIX has come down to near long-term avgerage levels.

The bad news is this, the Fed has kept interest rates low, which makes safe investments less attractive, the unemployment rate is pushing toward double digits, the dollar is at all time lows, and there is not a good piece of news on the horizen after GDP.

Once this week is over, reality is sure to set, and it's not pretty. The market has been on a high because the safe investments (the Dollar, Bonds, etc.) are not providing a return right now due to near zero interest rates. When we get past this week, as soon as reality sets, people are going to start seeking these safe investments again even though they are not attractive. More negative news, along with the slight shift in demand for risk is going to start making investors shift their money from assets in the stock market to safer investments like the dollar and bonds. This shift to safety is going to bring the stock market crumbling. If you start seeing the dollar rising and interest rates dropping, get out!

I see a fairly large scaleback coming in the stock market in the next several months. Like I said, after GDP, it starts to go downhill and the storm sets again.