Sunday, November 23, 2008


I was asked if we may be trading in a range for the next 10-30 years just like the market did from the 1960's-1980's (green box). I find that scenario highly unlikely. We can see a break in a key support line dating back to the end of the 1929 Crash in 1933. Of course, that support was broken in the 1970's, but they didn't create hundreds of financial weapons of mass destruction. No one knows where the official bear-ending bottom is, but prepare yourself. Just take a minute to look at the severity of the drop (in qtr bars). Only the last leg of the 1929 Crash exceeds our present quarterly decline.

(click to enlarge)
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Anonymous said...

(Joe here) reading cnbc website one of the articles technical guy said within days S&P under 700 ! any thoughts, thanks alot

Anonymous said...

Could you tell us what signals you are anticipating, or what scenarios might play out next?

John C. Lee said...

A large multi-hundred point decline from here is not out of the question. It is very, very possible though some may disagree. I do not have a crystal ball, which is why I trade on a day-to-day basis. Anything can happen and people need to flexible.