i have skimmed but not read all the thread - i see u have lost plenty of readers along the way as you all got a bit bogged down
i am no chartist per se but i have looked at plenty and followed the markets closely for 30 yrs ( i am not yet 50)
was it club sharer who said u should look at exponential rather than linear! well i cant really understand the issue but i would like to make a point which i dont think anyone said but might be what club sharer was alluding to:
the charts dont take into account inflation, retained earnings, cost of construction increases higher land prices etc etc
i went through an exercise last year when everyone had the jitters and I made the call that 4000 should hold ( i also called a low a bit early in feb 09 but then was pretty sure we were over the worst in early apr 09 )- i did this( the call re 4000) based on taking some numbers from previous lows and adding a % for retained earnings and inflation
- seeing that everything looks so bad i have just redone some figures since lows in 03 and generally those years have been low inflation years and using very very conservative figures (only 2.5% per year -say either 2.5% inflation and no retained earnings or more realistically 1.5% retained earnings and 1% inflation )i get to 3700 - this is interesting as the market could easily overshoot in this environment and drop near 10% below where it "should" - in 02/03 i believe it dropped 10% below where it "should" have been and so i used 3000 as a starting point and not 2700
take it with a grain of salt and/or pick holes in the above but i am not saying it will go as low as 3700 - i did a small amount of selling on thursday ( us market wed night effort was feeble considering how far it had fallen )
- I wont be selling on monday (though i despair how weak the dow bounced on fri and of course the s and p actually slipped a bit more!) - i will probably buy a few things later in the week even though i am sure things will still look "glum"- i guess what i am saying is that you either believe in free enterprise and corporations trying to make profits or u dont! - if you don't, then why invest in shares ( and i know some of you just trade and include shorting in that ) - i made 30% on the trade last year and yet my long term portfolio did next to nothing, but in the previous three years my long termers did 25% p.a. and trading was good also - I dont see much different about the market from the past few years!
