Few thought the markets in 2007 would ever again go lower than the 2002/2003 lows. S&P was over 1500 and 750 looked miles away. S&P falling at 50 pts a day will take just 20 days to fall a 1000 pts. Of course its not going to go down in a straight line. Even if the average fall is just 20 pts a day, it can still do it in less than 3 months. Just a need a panic to start and everyone tries to exit at the same time and the market tortures all the longs on the way down. Nasdaq 100 fell 80% during the crash
We are getting close to a market implosion. Checkout restaurants P/E. For example check out MCD. MCD P/E can go to 11 if the stock drops to $70. and that will be a reasonable high price for the stock. Check out tech stocks. ADI is super overvalued. Check out MSFT, TXN, CSCO,... Check out retail stocks like BestBuy. Overvalued up to the nose. The wise guy would park his 401K in cash now and will lock the profits. A wise investor will also take profit and will stay in sidelines for at least 2 months.
We don't want to see 2009 lows. Feds are out of ammo so hopefully all that cheap cash on corporate balance sheets will help keep them alive. Maybe feds are buying CDO's on their balance sheet, who knows. Everyone in corp america feeling fat dumb and happy given current market run and 401k balances. You talk to anyone "I'm up 24% this year!" It's the feel good factor. I doubt many would bail and they would get emotional all over again. It's a wicked cycle. Bernanke created another bubble and gets an atta boy for it.
I think the surprise will be to the upside, not downside. I'm calling the market goes up another 20%-30% from here, then re-tests the current levels briefly. Subsequently over the next 10-20 years, we see DOW 60,000. (Then the next big crash will be epic.)
yes, when the credit evaporates when the USA defaults on its bonds. For now, we are not defaulting, plus there's no trigger for a recession like high oil prices, so well keep going up and up . S&P 2000 can be easily reached, put a p/E multiple like the bubble in 2000 and S&P3000 will be reached.