irondoor91

Could the Dow Sink Another 50% by 2012?

Where would the price of Gold be if the Dow went down to 3800? Probably around $650, which is where it is headed after making a series of lower highs and lower lows since the top. Dow 3800 is the reasonable next target in Elliott wave terms, after a stab at 10,000 at the end of the current uptrend, of course. The bottom for the Dow, sometime in the period 2012-2014, could be as low as 500 which is generally the low of 1974. All mass manias always completely correct their blowoff 5th waves.

Of course, society as we know it will be completely changed by then. It is difficult to predict what type of governments will exist around the world, or even here in the US.


On Apr 05 11:28 AM Mutual Fund Wealth wrote:

> Personally I don't see the Dow going down at all and certainly not
> 50%
> If the market sunk to anywhere near the 3800 mark I can't imagine
> how high the price of Gold would go...
>
> Mentioned on my web page awhile ago that I believe the Dow will settle
> around the 8,000 mark and I believe proceed upwards from there. It
> seems experts-analysts-finan... gurus can't see or predict anything
> past yesterday, so I believe my predictions to be pertinent.
>
> Doug T
> www.mutualfundwealth.com/

Opportunity in Emerging Markets Amidst This Panic

Frear is a natural reaction, and it has a positive intention; to protect yourself from danger. It originated thousands of years ago when man saw others of his species running in panic. He didn't stand around waiting to see if it really was a saber-tooth tiger. He just ran with the herd that had alerted him to potential danger as he had been trained to do.

On the other hand, when man is hunting for game he applies patience, cunning, stealth and a small group with killing tools. He knows better than to charge in the direction of his prey. As he becomes better equipped to kill, many gain complacency and the highly skilled begin to supply others with meat as they become dependent on his hand-outs.

But those who became complacent and dependent lacked survival skills. They were out of shape and couldn't escape.

Sound familiar? It should, because we are seeing it play out today in our citizens who are sitting on their portfolios and 401-k's like deer in the headlights. "It'll come back" is the refrain. Don't panic. Diversify. etc.

By the time this decline accelerates down past the 8500 level, true panic and the herding instinct will set in. But it will be too late for many. They left too much of the decision making up to others and had let any skill in it that they should have acquired before investing wither away. All they have left now is either indecision or panic.

Thursday's Stock Rally Means Little to Trends

Nice work. It is helpful from time to time to be reminded of the "big trends" in these primary market indicators. The daily noise can sometimes be deafening if you are just watching the screen and clicking the mouse. These are the charts that should be reminding "long term" investors that there are times when "buy and hold" means a real loss of money and purchasing power. There are times when "sell and just get out of the way" is the trade to make. There will always be a better time to buy in the future.

Defining a Set of Core Asset Classes

This all sounds very good. Modern portfolio theory, diversification, splitting of the hairs, etc. There's just one problem as I see it. It's backward looking over the past 70 years and does not take into account what will happen to any portfolio or asset class in a deflationary environment. All of these asset classes mentioned depend on one thing--and ever increasing amount of bank lending and expanding credit.

You show no allocation to cash, which is the best performing asset class over the past 8 years. Why not? All of the asset classes mentioned may have increased slightly or not at all in dollar terms, but in terms of real money (gold) they are losers by a large margin. That's why a million bucks just doesn't buy you much any more.

These asset classes may protect an investor during inflation. But when the great unwinding finally hits, there is no place to hide no matter what your "mix". It then has just been another case of intellectual analysis.

Global Stock Markets: Let the Gains Begin

You can take a trading "stance" without actually executing a trade unless there is a trade to take. Don't trade out of boredom, but be prepared with a plan.

Sometimes you actually have to watch what the market is doing to determine what it is saying. Why try and be a hero? A "long term approach" can also mean "get out and wait for lower prices".