More important baseball analogies

According to Bill Fleckenstein in this piece at MSN Money, we are either in the 9th inning, the 3rd inning, or still driving to the ballpark, depending upon the game.

I believe the financial crisis is probably a little later in the game and could even be in the ninth inning. The chance of a collapse in any important financial stock now is rather small.

However, I believe the economy is only in the third inning of a brutal recession. As for the funding crisis and the potential problems in the dollar and in bonds, most people still don't really realize that a game has been scheduled.

As for the stock market, my hunch is the rally that has been under way for a couple of weeks will continue in fits and starts until sometime into early next year as folks become optimistic about what the new Obama administration will propose. A lot of the monetary and fiscal stimulus that's been announced has not yet had time to have an effect. And, since there's a big difference between proposing something and having it work, it's quite likely that folks will get overly excited.

All of these are reasons I haven't wanted to be short recently, though I think that if the stock market behaves in the fashion I just described, there will probably be a pretty decent shorting opportunity sometime in the first quarter. But for now, I think the most likely path is higher.
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So, to summarize: It's dangerous to be short right now, though it's probably too early to be long for real. (Folks who are adept traders might be able to make some money.) Other than in precious metals and precious-metal securities, I don't plan on doing much on the long side.

After what's happened over the last week or so (US dollar index now at 82.7!!), they may have just started batting practice for "problems in the dollar".