It's Been A Week??

What a slacker I am... not a single post in a week. Really not much to write about. The markets are still just bobbing around. They did have a nice rally to start the new year off, up to 944 on the S&P. Then the drift down the past couple of days. So now what? Well there still isn't a clear direction and the indicators are still mixed. We're right back where we started last Friday. There is still no valid reason for the markets to rally, but sometimes that just doesn't matter. If people want it bad enough it'll move up. However, the institutions still aren't doing any buying. The rally that started the year off was the small timers. Until I see the big boys buying in, I'm waiting.

Now, I had a buddy of mine ask me what I'd do with a pile of cash right now. He has some money that he's itching to invest while things are down. He asked me "where should I put it". My response was "under a mattress". And that's what I'd do for right now, a week or two anyway. Until the market picks a direction I don't want to get back in. I'm ready to put my retirement money back in, but I believe we have one more move down to come in the very near future.

Once that happens, it's rally time. A multi-month rally. It'll be strong enough and long enough that it'll suck everyone back in that got out. They'll keep seeing green up arrows at the end of the days and the weeks and they'll finally say "I can't take being on the sidelines any longer, I'm getting back in." When the Dow gets near 11,000, just as everyone is dancing in the streets that we're within 3,000 points of being back where we were in October 2007, the rug will be pulled out.

The days of putting money in and leaving it are gone. You're going to have to manage your money now. You're going to have to move, bob and weave, be alert. The next 3-5 years are going to be difficult.

I told my buddy that depending on what gloom and doom forecast you listen to, Dow 5000 is in the cards for 2009 or 2010. Some say even lower. As each wave unfolds I'll have a better handle on it.

Bottom line... hold on for the next week or two. If this is the next leg down we'll get to 7500 on the Dow again and possibly lower. Once that movement exhausts itself, it'll be time to get back in for a while. Don't be surprised by one last gasp attempt at a move up before we go down. Pretty much the same thing I said last week. The drop the past couple of days came just as expected. Now is decision time for the markets. The jobless numbers tomorrow will be ugly. Ugly beyond what Wall Street has already anticipated? We'll see. That may be why we've lost 5% in the past 3 days, anticipation of the bad number to be announced, therefore a rally wouldn't be a surprise.

Here is a diagram to show where we are in the grand scheme of things. This picture is not to scale for price or time, it's a generic diagram of a typical Grand Super Cycle that covers over 200 years. But it shows what the potential is. Take it for what it's worth.

http://evilspeculator.com/wp-content/uploads/2008/12/ewt_path.png