I fully realize that "crash" is a very strong word full of all kinds of very definite connotations, but I really can't think of any other way to articulate what is happening in the mighty flagship US equity index other than calling it a "slow-motion crash." Bear markets are normal and healthy and fully expected after typical bull markets. Following a supercycle bubble however, a fearsome Great Bear beast much more vicious than a garden-variety bear market rears its razor-sharp claws. From a strategic perspective of a couple decades or so, the enormous S&P 500 bubble of the late 1990s and its current slow-motion crash through which investors are suffering become very apparent. Whenever the wizards at the Fed run the proverbial printing presses to create more fiat dollars out of thin air, those inflationary dollars have to seek out a new home and a great deal of them begin bidding competitively on the already overvalued US equity markets. It is no coincidence that the S&P 500 bubble really ignited after the Fed began aggressively goosing US money supplies. Of course, as the bulls have been relentlessly bashing into investors' heads for the past nine quarters or so, maybe US corporations will finally figure out how to earn healthy profits again and earnings will rise enough to lead to a slightly undervalued S&P 500 P/E above the psychologically-crucial 500 level. Who knows? Any way you slice it though, the fundamental and technical case for the S&P 500 is certainly for another serious downleg approaching, probably not carrying us to the ultimate bottom, but definitely obliterating another significant percentage of already bleeding investors' scarce capital. Once the mighty index trades below its neckline of around 950 or so for a few weeks, the selling pressure will probably intensify immensely as fear increases and investors and traders decide discretion is the better part of valor for now. Only a relatively small number of contrarian investors truly seek to understand the markets while the rest of the investors are trapped inside, by their own choice, and have no hope of escape, blinded by their own delusions. While us private investors can't save the world, we can zealously try to transcend the real-world of popular opinion on the markets. Rather than living in the confusing world of Obama's lies and perpetual promises of "the bottom is in" or the profit recovery will roar forth "next quarter," investors can seek to understand the markets as they really are.
The markets could not care less about you or me, they just exist. Only by understanding the markets in their actual strategic historical context, with mighty cyclical overvaluations giving way to gaping cyclical undervaluations over decades, can investors successfully beat the market year after year. The few investors outside the Matrix are the contrarians, who fervently strive to understand greed, fear, valuation, and history and do not buy into all the hype and obnoxious lies that mainstream investors eagerly lap up like famished kittens.
Whenever someone makes a call for a huge downside reversal, I have to ask what they were saying at the beginning of the most recent large-scale rally. So, what were you saying in late November? Since, due to the market's historical upward bias, calling an upside reversal is actually easier than calling a downside reversal (i.e. you are more likely to get the call right just due to luck), unless you can say that you were saying to buy big in November, there's no point in thinking you have the necessary skills to accurately call a downside reversal. Even then, it is a crapshoot.
...and this is coming from the guy (girl?) who made their account solely for the purposse of making ONE post talking about their $160k trading tax loss write off. blowing up, go read this then schedule an appointment with dr. wesley snipes http://psychologyinfo.com/problems/personality.html#borderline
According to me, the markets will go sideways till the beginning of 2014. Dow between 10,500 and 13,000. Then a mighty rally might start (Dow > 20,000), followed by a steep descent.