What's Up?

The markets! And they are hanging up there very well. How much longer though? Maybe a day, a week or a month. How high? S&P 1050, 1100, 1150, 1200??? At 1000 right now after bottoming at 666 in March. Dow at about 9300 right now. 10,000 maybe?

In the upper left corner there is a search box. Put in "10,000" and click SEARCH BLOG and refresh your memory of things I was typing in late 2008 and early 2009 about the huge rally that would come once a bottom was hit.

Playing out exactly isn't it? Guess what... after a slight pullback soon there could be one more push up that will get us to the magical 10,000 on the Dow or 1100 on the S&P. Then that's it, we're done. The bigger and uglier wave down will begin.

I have an email drafted and ready to send to friends and family suggesting that if they held on through all of this that it's time to start scaling out. If they miss out on a 10% move up I aplogize, but it could save them from watching what they have left cut by 50%.

Fun with numbers:

Dow peaked at 14,165 October 2007
Dow bottomed at 6,450 March 2009
Dow right now at 9,370 August 2009

Even after a 50% rally from the bottom, it's still 35% below it's peak. Almost 5,000 points down.

I'm sorry to say that my overall prognostications so far have been correct. I'm much better at the big moves than the daily and weekly ones. But the bottom line is this. It is very conceivable that the Dow will be between 4,000 and 5,000 by the end of 2010. The best case scenario is that we'll just drift slowly down for a few years instead of straight down. I guess you could debate if that's better or not. Maybe ripping the bandaid off and being done with it all would be better.

I just ask that you keep an open mind. Don't listen to the cheerleaders on TV. They're the same ones that in 2008 said we wouldn't have a recession!!! The gov't didn't announce we were in a recession until December of 2008 and when they did finally acknowledge it, they said it had started in December of 2007!!!

Be prepared, be nimble, be defensive and cautious. I don't want to see you lose your hard earned savings. Yes, I could be wrong, I know that and I hope that I am in that I want the economy and country to thrive.

Nothing has been fixed. Everything has been smoke, mirrors and accounting rule changes. That's all. The banks have been getting free money and they've been playing the stock market with it! When that well runs dry there won't be anyone to prop up the markets.

Forclosures still climbing, unemployment still climbing, commercial real estate about to be the next shoe. Deflation or inflation? Or both eventually? Real estate pricing going to bounce back? You wish. I'm not trying to be a doomsayer, but think about things, look around... it isn't getting better. We have a lot of years of debt and waste to clean up. It's simply going to take time. The gov't printing money 24x7 isn't going to fix anything. Cash for Clunkers isn't going to fix anything (Hey, I know let's make it really enticing for people to take on more debt! Let's see how many reposessions there are in 6-12 months. Now that those people have car payments, guess what, they can't afford to stimulate the economy on a daily basis for the next 48-60 months.)

Watch, listen, learn.... be careful. Please.