A New Month, A New Decline?

For the past couple of months we've seen big declines the first 3 weeks of the month and then a bounce the final week of the month. Will December play out the same way? Now that everyone has noticed the pattern I kind of doubt it, but we'll see.

The rally the past 5 days was very impressive. And as I've mentioned, we'd see some eye opening rallies. One of the headlines I saw said it was the biggest 5 day rally since 1932. If anything, that should scare everyone. The biggest rallies have historically been in the middle of major bear markets and as we all know, 1932 was one of the worst bear markets in history.

If you dig deeper into the rally you'll see that it was small time investors. The big boys stayed on the sidelines. We absolutely will go back down and at least test the recent bottom around Dow 7500. Will we set new lows? Time will tell. I stand by the prediction of Dow 4000-5000 by the time this downturn is over.

Below is yet another article of how tight things are going to become for the average consumer and that of course is the core of our economy. And another article from Meredith Whitney who was one of the first to sound the alarm about the impending credit crisis. She's even more bearish than she was... Yikes.

http://www.cnbc.com/id/27993643

http://www.ft.com/cms/s/0/11344d06-befb-11dd-ae63-0000779fd18c.html?nclick_check=1


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WOW! Closing bell just rang and what a difference a day makes. Last week the markets rally 15% or more and in one day over half of it is wiped out. How do you even start to try to guess what's next?

Some very bad news items, some bad future projections, reality may actually be setting in.

However then you hear that we're "officially" in a recession that began last December and I laughed out loud when I heard some of those fabulous analysts say "Well that means we're 12 months into it already, it's almost done." Idiots. Sure, the "average" recession is about 10 months, but at what point do people realize that what we're going thru isn't AVERAGE! The over leveraging that's still out there is going to make for an ugly period in our national history.