I saw this in my work also...interesting. I think the trigger could be a currency war with China. China will dump treasuries, shooting interest rates up dramatically triggering a plunge. I expect this to happen in the Fall of this year.
Hey Digs- Yes, I've had my eyes on this setting up and it seems to have completed. Signs are there. Monthly and yearly charts are showing substantial drop ahead. Just position yourself properly, remove all ego and emotion and have an exit plan. Just don't personalize the market or this position. I can easily see this getting down to around 1200.
What garbage - this is a case of conveniently fitting todays chart with ones that look similar. Go back to the graph and look at blue chart- around days 350, 850, 950 and 1100 green chartdays 200, 750, 950 and 1200, All of these scenarios look similar to todays chart and could arguably be used as a prediction of the future trend - which is continuing up. The truth is - no-one knows and such predictions and chart fitting is a waste of time.
..."The truth is - no-one knows and such predictions and chart fitting is a waste of time."... Some how this was not a waste of time when a well know Market Wizard ( see book of same name) made millions in 1987 when he matched 1987 over 1946.. But who cares...2007 may be very interesting...
I completely disagree. Human behavior recycles itself over and over again. How many times per day does CNBC talk about equity "shrinkage" due to corporate buybacks, LBO's, private equity deals, etc. This is the same sort of talk that we saw in 1987 when Japan started listing American equities and people were talking about the incredible potential demand from such an event. Read Steve Leuthold's interview in Barron's from a couple of weeks ago. Very interesting.
I worked for PTJ in 1986 and he really believed in chart ANALOGS. He made an absolute fortune in '87 when there was such a huge flight to quality in Treasuries when stocks crashed and he had "limit" positions in T-Bonds.
Kurt, be sure to check out the Steve Leuthold interview in Barron's from late May in which he sees several similarities with '87. Also interesting to note: The Average Bull Market Duration ( since WW-2 ) is 36 months. So far, we are in our 56th month! The Average Bull Market Magnitude ( since WW-2 ) is 80%. From the Octover 2002 low, this Bull has risen 95%. :eek:
well if you want to talk about historical facts, the DOW on average has risen 50% from the bottom of the mid term year to the top of the pre election year (sp and naz more). So the DOW could reach 16k if history repeats itself.
No ones knows what is going to happen multi years out, those that do get lucky and there biased is accurate should give so back to the trading gods. Short term liquidity inflows and outflows to other asset classes are much easier to spot. Look at intra market analysis for those clues to trade gold, dollars, equity and fixed income. Much easier to do than predict 3 years out.