Markets to Decline 20-25% or 70% Chance of a Massive Rally

Literally two different headlines could be found on CNBC.COM at the same time today:
- Markets to decline 20%-25% from here
- 70% chance of a MASSIVE rally

What?!?!?! How can there be such opposing thoughts? Amazing isn't it? CNBC tends to pump up stocks and the markets. They're in the entertainment business and they bring guests on that are typically from brokerage houses, are agents, etc and their jobs are to get people to buy. They're salesmen.

What you have to do though is get beyond the sales pitch and get to some number crunching. Look, I know that most people are adverse to doing their due diligence and that most people don't enjoy reading endless articles about economic history, etc. I personally enjoy it and I also enjoy trying to find patterns within all the chaos. There are a number of theories and patterns and charting techniques that will show trends, historical happenings and you can then extrapolate that information and try to forcast the future. None of it is perfect, otherwise there would be chaos in that the markets had been figured out.

Here's my advice... take everything you hear and read, throw in a little common sense, open your eyes to what you see around you and decide what you think is likely to occur in the future.

Personally, what I'm seeing isn't good, and it isn't getting any better as each day passes. Sure, we'll find the bottom of this recession, but the question is when.

My research and homework over the weekend is in line with news headline 1 above. We're coming up on a 20% downdraft. Soon. As in Dow 7200 by the end of November or first week of December. There, I said it, that's my prediction. We'll peak sometime over the next week and then the slide will begin.

The good news is it'll be quick (band aid being ripped off as opposed to pulled off slowly as we went through in October).

The better news is we'll see a very nice rebound when it happens. I wouldn't be surprised to see us bottom around 7200 and bounce back to 9400 within a couple of months.

Where to from there? I dunno. That's too far out for my shiney new crystal ball that I'm still trying to learn how to use.

We'll see how I do on this prediction before I make any others. I'm ready to play the upcoming swings both ways and make a little money. I'll also put my retirement money back in for the bounce after we hit the upcoming new temporary bottom. Yes, it's still a temporary bottom. We have a long span of time and possible a long way down to go before this bear goes back into the woods.