monday trading, page-169

Danube

I just shocked myself.

After saying in that last post that we could see XJO 2,000, I read Terry Laundry's post and he says he sees Dow 4300 in 2010. A halving of current levels.

Is it sudden death or slower.

Here are the 2 scenarios that I have been battling with.

For a few years at least I have made the point that this could be like 1966-1983 in the US.

That is the standard 17 year consolidation/bear period after a similar length bull market.

1966 to 1983 in the US saw the Dow fail to make any real new high and the worst low in the series was 1974.

This time it is the SPX that failed to make the significant new high and 1974 equates to 2008 or 8 years or halfway into the consolidation/bear market. So 2008(/9) could be the shocker and produce lows never seen again.

ninelives is the current proponent of this idea and he may prove currect.

The second scenario and the one I ultimately leaned toward was that, yes this is still 17 year US bear/consolidation, but that the 40 year cycle was topping and allowed a year or two of respite from severe downside like 1969/70 and now 2009/2010.

That would suggest a low at the "normal" yearly indicator levels where we are now, then a rally, into next year at least and then the worst would come with a low into 2013.

Which is it?

I don't know. I think there is a low soon then another low in 2013. If we stop going down now then 2013 will be the severe low. If we go down a lot more now then 2013 will be a higher low.

What has shaken my confidence a bit in scenario 2 is that the 3 standard US cycles should be having a greater upside effect IMO.

This might imply that the 40 year top is already turned over and is having a downward action rather than providing some final upward assistance.

Don't you just hate it when there is some doubt? Not me, lol, certainty is so boring.