This market (dow) is going to crack, and when it does it will erase 3 months gains in probably a week or so, so you had better be ready. The market will only go up for so long on technicals before the fundimentals start to kick in and when they do everyone is going to want out at the same time.
Dow will crack
- Thread starter Trexticle
- Start date
I would like for you to state your proof, either technical or fundamental.
It's not because I necessarily disagree with your position, because a test of the March low is likely. But a loss of almost 2000 points in a week? That would require a catalyst.
Here is my take.
The 8800-9000 point level on the Dow is crucial because it is a historic resistance level (1998, 2002, and current) and support level (2001). Also, at the current levels, we are nudging up against the 200 day MA.
To continue the technical argument, another drop off a cliff in the near term is as likely as a period of asset inflation due to stimulus programs and the massive printing of money.
In the former case, you have a sell-off because stocks are at important resistance and it is a good place to leave the public holding the bag and taking the losses. In the latter case, you have an upside breakout leading to a four or five year artificial "recovery", enough to boost the Dow to the 11K level, enough to re-elect the current administration, enough to complete a massive head and shoulders technical formation. Once the stimulus is spent and we are immensely in debt, the reality of dire situation we are in takes hold and the real crash begins.
The bubble is being re-inflated right now and who knows when it will pop.
It's not because I necessarily disagree with your position, because a test of the March low is likely. But a loss of almost 2000 points in a week? That would require a catalyst.
Here is my take.
The 8800-9000 point level on the Dow is crucial because it is a historic resistance level (1998, 2002, and current) and support level (2001). Also, at the current levels, we are nudging up against the 200 day MA.
To continue the technical argument, another drop off a cliff in the near term is as likely as a period of asset inflation due to stimulus programs and the massive printing of money.
In the former case, you have a sell-off because stocks are at important resistance and it is a good place to leave the public holding the bag and taking the losses. In the latter case, you have an upside breakout leading to a four or five year artificial "recovery", enough to boost the Dow to the 11K level, enough to re-elect the current administration, enough to complete a massive head and shoulders technical formation. Once the stimulus is spent and we are immensely in debt, the reality of dire situation we are in takes hold and the real crash begins.
The bubble is being re-inflated right now and who knows when it will pop.
Japan had a similar credit/debt bubble that burst in 1989, and look at the results, 20 years of sideways to down market movement with some severe downdrafts. The only difference now is that this bubble is more worldwide vs just the US markets. I think we will have a long row to hoe.
We could be in the similar position as the Nikkei was in June/July 1993. Who knows.
Click the link or you maybe will have to cut and paste the link into your browser, or maybe someone could post the actual chart 25yr Nikkei.
http://finance.yahoo.com/echarts?s=^N225#chart2:symbol=^n225;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source
We could be in the similar position as the Nikkei was in June/July 1993. Who knows.
Click the link or you maybe will have to cut and paste the link into your browser, or maybe someone could post the actual chart 25yr Nikkei.
http://finance.yahoo.com/echarts?s=^N225#chart2:symbol=^n225;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source
In Japan its known as the lost decade. It looks more like 2 decades to me.
http://www.sharelynx.com/chartstemp/free/chartind1CRU.php?ticker=^N225
http://www.sharelynx.com/chartstemp/free/chartind1CRU.php?ticker=^N225
gigsup,
That is a very good point. The US is very lucky that we are "the" dominant world power, we have "the" world reserve currency, and for a long time had been the best place for foreigners to invest, otherwise our S&P would not have enjoyed that double top. Oh, I forgot to mention the powers that be(with the worlds fastest printing presses) that goosed our markets to get it to that point also.
That is a very good point. The US is very lucky that we are "the" dominant world power, we have "the" world reserve currency, and for a long time had been the best place for foreigners to invest, otherwise our S&P would not have enjoyed that double top. Oh, I forgot to mention the powers that be(with the worlds fastest printing presses) that goosed our markets to get it to that point also.