this is an interesting discussion. short term i agree with...

this is an interesting discussion. short term i agree with slaveman. on friday we saw the biggest capitulation here in OZ since the january capitulation.......but the US was quite benign on friday night. To me the DOW is now akin to the unexploded world war 2 shell you may find in your back yard from time to time. Not quite sure if and when it could blow.

longer term i see a little more hope than some others. I believe in the 17 year up 17 year sideways cycle of which we are about half way through. The sideways channel is wide (7200 -14200) but the dow only visited the edges for a short time. so far the dow has spent a lot of time in the narrow 10000-11000 band. last time we were in that band 2003-2006 the australian resources prospered. IE the US economy is in a 17 year consolidation but perhaps not aussie resources. when the US finally stabilizes we shall see if we resumethe resource bull.

the other scenario is that the dow continues to head down towards 7200. that target may be reached by about 2010. after that we could start rallying towards the top of the channel. the bulls will cheer and hail the return of good times but in reality we will only be returning to the top of the sideways channel. around 2016ish we should break out of the top of the channel and the US will truly be back into a bull market.

I wish i had figured this all out 8 months ago as i could have save myself a small $$$$. but now i have some lessons I will carry for life.