Its been quite some time since I posted here - not since calling...

Its been quite some time since I posted here - not since calling the "crash" of 2002-3 in fact. Seeing the inevitable, I got out of stocks in April last year, and sold my house this year.

The DJIA is, if you hadnt noticed, undergoing a correction of a fair magnitude, which is long overdue. Asset markets were allowed to blow right out of proportion after 1996 under the "Greenspan put" with a rapidly expanding money supply, and the usual run of lax practices became established.

See http://s359.photobucket.com/albums/oo36/swisscustard/Bulllcorrection2008.gif

According to my thinking, the DJIA has in fact been correcting the bull run 1980 - 1999 since the end of 1999 and hopefully is getting somewhere near the end of that phase. The question now is whether the low around 7400 will hold. If it doesnt, the present correction which is quite modest in secular terms at about 38% (although very rapid) will blow out to a fibonacci 61.8% or about 5000. This is quite a decent washout which should knock the USA financial system back into a semblance of order.

The 1993 low might well hold however - the next few days will show us. In that case we should see a fairly smart recovery after some levelling out.



Moved from the "United States" forum. Original message number: 1158