Everyone and his brother expects 1120 target on SPX, and 1987

While we are all foxused on getting to 1120, good to review some history.

In 1987 Germany started raising their interest rates, and US responded by threatening a weak dollar (allowing US to easily sell goods to other countries, and hard to buy goods from other countries).  After spouting off by the US, the next day was the big 22% of 1987.

This week, Australia decided to raise rates.  

Seems to be a lot of focus on geopolitical events right now, and saber rattling in the media.   Also seems like the buck could be used as a punishment tool for Iran.   They want out of the buck....OK, let them sell into an abyss.  then when they have taken a hit and got out of the buck, then rally up the buck, punishing Iran.

Shorted ORLY today.  First new short in several weeks.

http://books.google.com.au/books?id=KJs1WDN54wEC&pg=RA1-PA187&lpg=RA1-PA187&dq=James+Baker%27s+comments+us+dollar+Deutsche+Mark+1987+crash&source=bl&ots=o7l3WzlSEa&sig=jjnWrB7C2vg_JtCnU1uGPe4KwMI&hl=en&ei=FavMSs-OA8eAkQWP6N3iBA&sa=X&oi=book_result&ct=result&resnum=2#v=onepage&q=James%20Baker%27s%20comments%20us%20dollar%20Deutsche%20Mark%201987%20crash&f=false