The question for viewers on CNBC this morning was, "Where do you stand on Lazlo Birinyi's call?". Mr. Birinyi, who was the head of equity research at the former Salomon Bros., has said that he thinks the S &P could reach 2800 by 2013. That would be about double of where it is now. Given that many of the "traders" have been warning of a market top lately due to the declining volume, and the general bullishness, (both being "contrarian" indicators) his forcast will tend to be regarded by the traders as another bearish contrarian indicator.
I think the stock market appreciation can be thought of as inflation. As the dollar gets weaker, the stock market goes higher. The same as the precious metals and oil and commodities in general.
A look at the USDollar, as tracked by the UUP fund shows the large possibility of a break of long term support. A 20% down move over two years would certainly not be unusual. If you look at the same chart, you see the US Dollar has lost about 20% over the last two years and the S&P has doubled. I don't see why the S&P couldn't double again if the dollar goes down. It would have to be an orderly selloff in the dollar. A panicky move would probably not be good for stocks. Kind of like boiling a frog. Gotta do it slow, or the little sucker wants to jump out of the kettle!