June 18 - Tidbit of the Day

Take it for what it's worth. But it's kind of nice to get a press release before the next big crash. ;-)

In all seriousness... it's coming. Whether it started last week with the peak of the S&P at 960 or in another week or two with one last rally attempt to 975... it's going to happen.

I've spoken about it before. I talked about the bottom around 650 followed by a 50% rip your face off rally... now it's time for the next wave.

The rip your face off rally caught me completely off guard though because it was straight up and I missed a big chunk of it, but I didn't chase it. I'll wait for it to come back to me.

Please folks... watch things closely and be willing to get out with what you have left if you stayed in this whole time. S&P peaked at 1575 in 2007 and it's heading to 500 or below. That's around a 70% decline, or more. If you get out now with the S&P in the 900 range at least you won't watch your savings cut in half again. If these forecasts are wrong, you'll miss out on a 10% rise. Risk versus reward? Be nimble. Be aware.

This bear market rally was nothing more than a way for banks in particular to recapitalize themselves by selling shares at higher prices only to let things tumble once again. Remember, nothing has changed since last fall. Nothing has been fixed. The accounting rules were changed to make things look better on the balance sheets. That's it. Trillions of dollars thrown at this to keep things afloat, but nothing actually FIXED. Same problems exist.

Rising unemployment means rising foreclosures, means surplus of inventory, means lower prices. Higher interest rates also means lower home prices. All of this hits the people that are able to keep their homes. No home equity available, unable to sell if underwater... We have a long stretch ahead of us that will be unpleasant.

Unemployment and housing aren't the only things obviously. There's commercial real estate, deflation or hyper inflation and a whole host of other pieces to the economy. I'm simple minded so I keep it to just a few things that I can understand.

This is the longest post I've made in a while. Don't take my word for it of course. Read the real news, not the manufactured "green shoots" and cheerleader news.

The article below is not meant to be taken as gospel. It's of course just one opinion. But it's one shared by many that I follow. This is the boldest prediction I've seen though in the way it was announced. I'm taking it with a grain of salt but I do know the peak of this fake out rally is near if not already hit two weeks ago.

The second link below is a chart posted in late February showing what the overall wave structure could look like. A little eerie in that he pegged the 950 range for this rally along with the approximate timeframe even though he admittedly was just drawing rough lines. He admits it isn't to scale per se, but pretty damn good so far. He targets S&P at 300 for the upcoming P3 wave. Again, no guarantees, but worth realizing as a possibility.



http://www.prweb.com/releases/2009/06/prweb2537224.htm

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