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If Marty McFly, played by Michael J Fox, was suddenly catapulted back from the 1950's to Wednesday October 05 2006, he'd probably not be too surprised to see that the Dow Jones was doing, exactly what it was doing for most of the mid-part of the 1950's... Setting new all time highs every day... The real differences that might really surprise him, would of course be how today's ultra high-tech economy is light years beyond where it was in the nostalgic 1950's, at the early part of which the Dow started hitting 1950's all time highs at 253. Today, at almost 50 times higher, it would be hard for anyone from that era to contemplate just how far the Dow was destined to travel from those laid back times, that actually hallmarked the all time historical low point for unemployment in the US at 2.3% and the best of times for many as they built their post war families and fortunes and began delivering a magnificent generation, that are today's boomers.

Long term readers will know that we have been expounding upon this theme now ever since our April 2003 call for the S&P 400 MidCap to hit new all time highs in the fall of 2003 and the numerous other indices that have followed, culminating in the Dow Jones record close that was finally registered Tuesday and greeted with a stampede bull run to the upside yesterday adding a stunning 123.27 points and 1% gain. Markets are really incredible in the way they can discount the bad news of the present, housing slowdown problems, lower job creation and 17 rate hikes in a row, plus everything else including the kitchen sink being thrown at them and yet the can stridently move to new highs, based on the sheer confidence investors hold for our economic future. It is exhilarating to experience, as it is humbling to have not just been talking about this day for eons, but have been fully expecting it to the point of being ridiculed by our peers. The fact is just two months ago, Investment Intelligence was reprinted on one of the World's top financial Websites with the headline: "Why we expect the Dow to hit new all time record highs soon" - And to see that day finally come Tuesday and move higher with such force yesterday: 'It doesn't get much better.' And in recollecting our earlier forecasts of much higher highs down the road in keeping with our emerging 3rd Wave of a 5th Wave Super-Cycle on top of what we see as better performing markets in the 21st Century, we have been unequivocally bullish on these markets having remained steadfast throughout the year's earlier correction in being among the first to declare in mid-Summer, that the lows were in for the year and that the path of least resistance, clearly appeared to be to the upside, especially on the back of some very strong impulse waves. And it was the same exactly 100 years ago in 1906 in the Industrial Revolution was gaining traction in the go-go zeros of the 1900's, to the roaring 20's and especially 2026 when the Dow really put on the afterburners on its record run into 1929. So today the High Tech Revolution is driving the Dow and increasing numbers of stocks higher, and as we said yesterday, Tech is gaining more ground every day, such that the Nasdaq itself put on one of its best performances in some time on the back of a soaring Dow and S&P 500 and numerous other indices that began to join the stampede of buying on Wall St. Even the Transports scored one of its best sessions in some time gaining 100 points. And along with the Dow, overseas markets have also been soaring, with Mexico setting new all time record highs all week, even ahead of the Dow and Switzerland closing in on its own record, followed by most European Bourses also. Even Japan has begun to awaken following a lengthy correction after its own breathtaking run that started just over a year ago when we reiterated our call for Japan's Nikkei to probably run to 20,000 plus in 2007 and possibly hit all time highs of 40,000 plus by 2010 and perhaps even run as high as 100,000 by 2020 or 2030. We've previously explained in detail our theory of accelerating Global growth on the back of China's astonishing 28 years straight of 9% or so growth and this year China is expected to grow at 10.6% and 9.5% in 2007. With the increasingly faster pace of growth Worldwide, our theory is that stockmarket growth will be synchronized or aligned to reflect these higher rates of grown in this Century in the following way: If the 19th Century economic growth was more like 1% or so and stock market growth consequential then the 19th Century would be a 1. In the 20th Century growth was closer to 3% average and stockmarkets had consequential annual appreciation either side of 3%, but over the past 30 years or so, there has been a noticeable speedup, initially in Japan and the US, but that has been spreading to most all World markets especially in the past 10 years or so, where periods of hypergrowth have been experienced and along with that astounding stock market appreciation, most especially in Russia, which has enjoyed staggering stockmarket growth since our bottom call of November '98. So in a way on the back of China's already proven 9% rate of growth, extrapolating out, the 21st Century could well be a 9 in market terms. And with our view of the World economy, as a 200 car train, representing most all of the World's countries, being pulled by the workhorse of five giant engines representing the 5 largest economic regions of the World, being the US, Canada and Mexico, China-Japan, Old Europe, India and the sub-Continent, Latin America and Russia. And, even if this train slows down a bit over the next year, we believe it will maintain its momentum well into the next decade... In fact, it was recently said, that China, let alone India, is growing so fast, that by the year 2030, it will have exhausted virtually all of the Worlds resources by then, such that we might need another earth sized planet to satiate its needs. Commodity Boom Re-Kindling?   That's why we are in the mother of all commodity booms, that is just in a mild slowdown, before things heat up again and the World really starts to run low on everything it has been used to getting more easily. Right now, 20% of the World's cranes and concrete is being used in the construction of the World's fastest growing city in Dubai, and another 50% is being utilized in China, where Shanghai is growing at 15% and has another 1,000 skyscrapers programmed for construction by 2010 not to mention Beijing and the Olympics, that does not leave that much for the rest of the World and in spite of the so called slowdown, shortages abound and there doesn't appear to be much relief in sight. In another important related development, the World may be starting to run low on grains and foodstuffs. Meats have been trading near their all time highs for the past few years and grains are looking increasingly like: "A New Bull Market is in the Making" sometime soon here too. Overnight Gold and Silver are sharply higher implying that following their most recent correction, lower levels are finding very good support...   Re-Capping An Unfolding Buying Stampede  On Wednesday, we recounted how the fury of the market exploded in moving higher, but that was just a taste of what was about to become Wednesday's increasingly broadening participant buying stampede that really swept the Nasdaq higher also at twice the rate of the Dow, so the impulse wave we were looking for to overcome negative divergences, was delivered with a vengeance that also saw the Transports outperform the Dow two to one. So our broadening participation on increasing volumes appears to be unfolding and there might also be the very real prospect that numerous hedgefunds have been caught short and the furious breakout over 1,250 on the S&P has sent them reeling and scrambling to cover their positions, adding even more buying power to the market stampede. This is how these rallies can gather such strong momentum that could potentially hold for some time. The next few days should be telling on just how far this major rally can endure.  Stock of the Day - RIMM - Research in Motion Our Million Dollar Buy recommendation on RIMM over the past few days and here yesterday, has thus far turned out to be one for the ages. And, we did make the point, that this is the kind of issue that Millionaires and Billionaires should be wading into, given the potential strong upside potential we outlined here yesterday, combined with the incredible liquidity that this issue has offered over recent days, trading well over a Billion Dollars each session. It doesn't get much better than this for the likes of Buffet, Rogers or Soros, especially when they get handed a 8% gift for their efforts and if our judgment continues to be correct, this could be the start of something really big and impressive. Actually, for any large players following MODAR over the past two months it's been a stockpickers dream and would have afforded the very richest amongst us to accumulate Microsoft MSFT in the low 20's, Intel and Cisco at 18, GM at 19 and 27, IBM at 75, MOT in the low 20's and Oracle under 15 to name but a few, this has been a really good year so far to be picking up undervalued Dow components really cheap. GM Breaks Off Merger Talks - A decision that could live in infamy The one thing that saddens us was GM's decision to call off talks with Carlos Ghosn. We would have to give GM the benefit of the doubt at this time, but their decision yesterday, if the company does not radically improve its circumstances, could come back to haunt them and to us, it appears GM management has its head in the sand and is not acting in the best interests of their shareholders. Carlos Ghosn has a proven record of stunning turnarounds and would not be wooing GM, unless he saw the tremendous upside we see, with a breakup value of $100 plus and an enterprise goodwill and intellectual property valuation in the stratosphere. But GM is not out of the woods by any measure and while we respect the decision that a merger with Renault Nissan might impact or distract current measures to turn GM around, we see the most upside for GM with Carlos Ghosn behind the wheel and believe GM would immediately jump to $40 and probably $50 soon after at least. GM is trading at an extreme discount that is a very bad reflection of current management. The stock is almost completely covered by the cash it has in the bank and so investors are not willing to pay any premium for the company's irreplaceable assets, which is absolutely insane. GM management may or may not have their heads in the sand, but time will tell, just what the implications of yesterday, may bring. Therefore we are recommending the exit of GM, on any break of $32.75, to at least protect the gains for any who have so far gained on this. Trade Well From the Desk of Savant

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