Posted on 02/28/2009 11:18:50 AM PST by arkadyka
I have not done a stock market post in a while, but this one is important considering the latest developments. The latest time I spoke about Dow 7000 and why a hold of that support line is extremely crucial.
Unfortunately it seems like the break will happen inevitably and doing so will essentially open the flood gates. I have provided a chart for you that someone else made and it illustrates a very obvious long term pattern, a chart of the S&P 500.
Don't mind the wave count, but do realize that flirting with 2001 lows really illustrates the weakness of this market. If in the next few weeks Dow 7000 or in this case S&P 750~ is broken then expect the market to shave off another 50% of it's value! There is good news in all of this though, once a breach of that vital support occurs, a reflexive bounce will occur via a powerful bear rally. Thi rally could be a 30-50% move and will provide an opportunity to exit all long-term positions, however for the most part it will only suck more unsuspected individuals into a powerful move down to the ultimate lows of (Dow ~4000, S&P ~400). This happens in history all the time and will happen again.
If these long term projections are met, then it might take anywhere from 5-12 years to recover back to the highs of 2007!
I call this the Obama stock market because his administration and his policies are completely and utterly responsible for this vicious sell off. Even though the financial collapse is not his doing, the amount of damage his promises and policies do to the market cannot even be measured.
(Excerpt) Read more at rkdpolitics.blogspot.com ...
Indeed. The S&P closed below the former lows of 741 Friday. The market could well plunge next week a la 1987.
The budget, IMHO, with it’s vendetta against the wealthy was the final nail in the stock market’s coffin.
A black monday scenario is somethign I considered entirely possible, but there is a small chance of that happening. Due to the already excessively prolonged decline - a rally has to happen first.
I am thinking if it DOES do that, then it actually might be a good cleansing move for the market as it will leave a ton of people including my 401k completely wiped.
I agree, but the probability, while a minority, is much higher than it was a month ago. If it is going to happen eventually, better now than later. That is cleansing. A plunge after a 6-8 month rally makes things worse for everybody. This has been a slow motion train wreck for a year and a half, in part, because of all the lies from presidents, the fed, the treasury, bank CEOs, the banking committe, etc. etc. etc.
-ccm
Additionally we can expect more collapse in the real estate sector. Obama just put thru a cut in the mortgage interest deduction for anyone or any family with more than $250K per year to 28% down from 35%. This is effective immediately. This spring and summer are going to be a complete turkey shoot in the Real Estate markets.
“I don’t pay attention to quant crap like “support lines”. Nor do I put much faith in a prognosticator who says “We’re heading for a crash, but there could be a big rally first.” Hard to be proven wrong that way. Quants are the global-warming whackos of investing. “
Quants aren’t always bad. In this case, this info is relatively accurate although I don’t think the dow will go as far as 3500. Maybe as low as 5500. But the charts are pretty predictable, as it goes.
The Dow has made its 50% Fibonacci retracement. Next up is the 63% retracement, to around 5200. If it finally bottoms at 80% or so down, that will be at around 2800. The Nasdaq corrected downwards about 80% after the 2000 tech crash; the Dow is due for an 80% correction, too.
Agree. The wealthy will channel their money elsewhere and ride out the storm. No one else has any incentive to invest.
Well based on real value (i.e. a gold standard) the market should be around 3,000 right now. I am actually amazed this line of resistance held this week. I figured by Mar 1st we would be in the 6,000’s.
The housing market is about to tumble at a rate never seen before along with that unemployment is going to start to rise even faster.
The scary part about this market is their is no really definable bottom - that should concern everyone. But alas Obama would love the market to completely collapse...they have all been part of the plan to create this economic chaos so they could take the election and create this new socialist government.
This ultimately is going to lead to civil war in this country...just crazy to even think we would all have to be talking about this.
Yes, but we really fell off a cliff in late August 2008 when Obama was officially nominated. Down 40% on the DOW since then.
It closed at 735.09 Friday.
I read one guy say that if it closes below 740 monday, he's heading for the hills.
The market could well plunge next week a la 1987.
////////////////////
Date Close Decrease Percent
10/19/1987 1738.74 508.00 22.61
1987 will seem like a good time. It is so easy and profitable to short the market these days...
The more money the obambinuts throw into this fire, the hotter it will get, the farther it will spread and
the more it will burn.
Folks are considering this weekend whether they should leave their money in the market and wait for the bounce, or cut their losses at 50 percent and pull the rest out monday.
Once they learn that it will take 10 years to get back to where they where a year ago, it will be an easy decision and we could see a one day 20 percent drop tuesday.
down to 5600.
Watch for obambinuts to try and close the markets.
We should be deleriously happy ~ overjoyed ~ leaping into the air.
I included a chart that demonstrated why one number is more important than another.
There is a massive supply/demand churning zone in 7,000 and none at your imaginary number.
Get your money out now before it’s confiscated by Obama is going to be a very hard paradigm to break.
Fibonacci series. Is that a reliable forecaster.
That would seem more in the line forcasting with animal entrails.
I'm not mocking you though, the series describes natural progression. Never occurred to me that the market was a natural phenomenon.
Is it that reliable?
BTW, I went cash back in mid-September.
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