I think you'll be very wrong, VERY WRONG about your prediction here. Thats my analysis and I'd wager to say I've been at this a lot longer than you. However....I'm also not so pigheaded to marry myself to my opinion. I am a trader first and foremost and price action is my guide.
This thread is worthless without pictures. And there is more rethortic and empty words without any content here then an Obama speech.
More really bad economic data is going to unravel. Lots of jobs lost, massive credit card default (this is 20% average revenue for banks that are already being bailed). Solving credit with more credit, all focus on deflation as a buzzword disregarding the inflationary pressure coming by the massive increase in money supply brought by the "bailout". Add to that lower rates all over the world. Last time i checked lower rates foster spending, not saving. Basically two ingredients that brought this mess we're dealing with in the first place. The poor implementation of solving foreclosure problems that basically encourages people to default on their mortgage to get a better deal. I can go on and on...
Acqua, sadly enough you're describing the situation for the support to hold (except for the first two lines of your post). If credit picks up again and inflation takes off, that will save the market, IMO. The crash would have been pushed off to the dollar at that point (and might not come as a crash but a slow bleed). Every up day we have lately seems to be a day when the thought of inflation starts winning over the thought of deflation, it seems from the charts.
I see your point, hence my note that sadly this is the flaw of trying to solve a credit crisis with more credit. I guess the difference will lay on the timing of events unfolding. Clearly lowering rates is aiming towards stimulating credit/spending. IMO it's a horse race, if credit/spending kicks in before the credit card default, we may see a bit of light,and the fight ahead will be against inflation. If the opposite happens, I think there will be a clog in the legal system for the amount of Bankruptcies/debt collection related suits that will develop. There will be social unrest as people will be enticed to load up on spending without the intention of paying, something similar to what happened in Argentina a few years back. I can tell you that Credit card companies already see this threat as they have begun jacking up rates and lowering credit limits to card holders.
It's interesting to look back at history and take note of all of the things Hoover and FDR did that were intentionally inflationary and then read FDR's fireside chat about how inflation was such a problem for the common American (I think that year it ran about 15%). Bernanke's doing all he can to inflate right now. It's no secret to the smart money. The question is just whether the measures he's taking will filter out to the broader economy fast enough, and heaven forbid we become an Argentina or an Iceland (I don't really think that's too big of a worry, but it's scary). It always gets me how much of a surprise bad inflation is to the average American, when it's all right there in the history books.
all my leading indicators are showing sp500 1200 by year end. buy FSLR, RIMM, MA, V, BIDU, AAPL, and GOOG