Dow About To Go To Hell???

What's up everyone...Your resident guru is back.

Is the dow about to go to hell? Just broke some significant support.

 

Maybe middle earth? If we blow through the October lows things should get real ugly. Of course will the PPT allow it? They don't seem to care about today's plunge.

 

LOL, this reminds me of something my mentor used to tell me.

If it looks like a duck and it quacks like a duck, then its probably.......... a duck.

 

The significant support is the 8000-8300 region, not just the one line you have drawn on your chart.

 

Corso weren't you the guy who said Dow was going to break out?

Are you a contrarian indicator...

I told you at that time we had a 'likely' topping pattern and the DOW would crash. Good thing you're paper trading... and just "learning"

g'luck bro.

 

at the time I said DOW approx 7500

Let's see what happens

 

Off topic, but an interesting signature - nice idea in theory, but it's hardly a near term reality in large scale application. Have you given any thought to how they'll deliver liquid hydrogen to "gas" stations across the country? What level of enormous infrastructure change that is? Not just delivery and storage (which is significant), but also having to replace normal gas pumps with laser guided, computer controlled affairs because you can't let people do the pumping themselves. And you can't co-exist with existing gas stations because of the increased explosive danger, so you need all new "Hydro stations". And how about what would happen in a car accident if the tank cracked?

Cutting over to hybrid autos (and making SUVs and minivans use the same emission and fuel economy standards as cars) is a whole lot easier, can be done very quickly, doesn't involve a trillion dollar, ten year infrastructure upheaval, and would cut oil dependence to a fraction of what it is now. Possibly enough that domestic production could fully cover demand while the much longer timeframe non-oil alternatives are developed.

 

I see two possible outcomes here from a 100 year DOW chart:

Some more days like this and maybe just maybe the retail investor will be pissed enough to call en masse to get what little money they have left in mutual funds out. This would clear the decks and maybe take prices all the way back to 1994 levels. About the 5000 level. Then we can have real rallies, real buying. Take a look from the bottom in 1932 to 1965, with some exceptions the market went up in straight line.

OR

We trade in a range like 1965-82, for who the hell knows how long, maybe 15 years.

Which one will happen? Don't know, but I think we'll soon find out.

I think we all would prefer the former over the latter, but sense the latter may prevail? Any thoughts?

Also consider that mutual fund cash is only 4.5%, so they have been fully invested all the way down.

In 1990 it was about 12%, and in 1981, was about 14%

And that parabolic moves tend to end where they start, that would be back at 1994-95 levels.

And that at the "real bottom" in 1974 Bears were > Bulls for 6 months, not 6 hours like in Oct. Still 50% bulls..not good!

Just some food for thought from me, I'd like to hear others' view.

 

Au Contraire! I made no such statement! As you may recall, I merely pose questions...

 

P/Es are still lofty. Div yield is very low by historical standards. Somehow this has to work itself out. Either earnings have to increase or prices have to come down. Given the economy I think the later is alot more likely.

just my .02