Dow Target 6,617, October 25, 2009: Here Is Why

Seeking Alpha

History may not repeat itself, but it does rhyme. I have been in the camp that this is a bear market rally. That is what I thought we would be getting in March. I'm also in the camp that because of the need to deleverage debt in most of the developed world, we will likely be heading into a global economic depression and perhaps at worse case, a collapse in the banking system.

I took a look at the bear market rally of 1930 and have found many similarities to our current bear market rally. Here is a chart from MSN money of the Dow Jones Industrial Average from November 1929 to October of 1932.

As I mentioned before, the bear market rally of 1930 lasted 157 days and had a gain of 42.85%. Our bear market rally today is now up for 152 days since bottoming on March 6th and has a gain of 44.07%.

Read it and learn a little about the past and the future!

reply to post by Tentickles

I take the first 6 in the prediction number 6,617, turn it upside down to make 9 and come back on October 25 to see if my prediction 9,617 would be closer to the actual number than the one Alpha has come up with.

Nice read.

Yet, it still seems unreal.

Denial is often hard to overcome. Must be a genetic thing....

Im in agreement with you tenticles! All this green shot non-sense is getting old. In the US, this is a consumer based economy. People can't spend money they don't have.

HOW RETAILERS DID IN AUGUST: Soft back-to-school sales are not good news for retailers and a monthly tally of 32 chains' sales found a 12th straight year-over-year decline, but there were signs the holiday season could be less dismal than feared.

www.nytimes.com...

People who can't find work will not spend. If US consumers don't spend, then companies don't make money, so they lay off more people. Its a viscious cycle.

Also, Foreclosures are driving the modest easing of the real estate market's declines, and I read that 1 in 10 American families are either in foreclosure or on the cusp.

Unfortunetly, I see nothing good for the economy over the next year.

Everyone, just go back to 1974 like I have been saying for the past 3 months about and see that this 1930's crap, is just that, crap.

The 1974 energry crisis= 2009 Bank crisis

I would debate the technicals with anyone, infact "technically" the crash in 74 was worse than the one now

In the 30's we failed to take out a sequence (trendline) that sent the market tumbling in fact in a post in the market thread - HX posted a picture, and I proved it, if anyone would like to go back and look- we have taken that sequence out this time around

Sorry, but you guys are getting "had" by people that are searching for webhits and advertising dollars - remember - all my help is free, and you dont have to sift through complete garbage and then look foolish in the future, even though I have posted garbage in the past before as I am not perfect like some on these boards

reply to post by GreenBicMan


I hope you are right. I gotta say you have been right in your posts on the up to the minute thread when I used to read it a little while ago.

I just don't see it. A lot of economists are say the opposite. Take a look at that real good thread started by Ex_MislTech www.abovetopsecret.com...

You should take a look and give your point of view in relation to the info in the OP's post.

reply to post by finemanm


My friend, I have given my opinion on everything ranging from dark pools of liquidity to high frequency liquidity levels and even me living at my parents house lol

But seriously, thats why "retail" people lose money usually in the stockmarket - i.e. people like you - no offense, seriously, its because you dont or not just you - but you know what I mean - dont know how to read price action and dont understand technicals

I am also "retail", but if I had the capital backing I wouldnt consider myself a square either - but it comes from work just like anything else, you prob. dominate me in something that I couldnt hold a candle to etc...

I do this honestly for 10+ hours a day, so thats the only reson I am better than a 50% clip, its because I have studied historical performance like most people go to college and get their masters, and im serious, infact I prob study harder if you could actually believe that after you factor in I have been writing all these programs etc.. trust me this is not bragging or boasting, because there are some that know just as much if not more than me most likely, but like I said, its just practice like hitting a golf ball or whatever

edit : by the way, I hope I am right too, I think I will be



[edit on 3-9-2009 by GreenBicMan]

[edit on 3-9-2009 by GreenBicMan]

reply to post by GreenBicMan


But wouldn't you agree the real economy (i.e. unemployment, poor sales of goods, foreclosures, lack of credit, inflation, etc...) have a profound effect on the market long term? Graphs and charts are great in the near term, but no matter what a chart says, if another huge bank collapses or another massive round of layoffs come when the holiday shopping season sucks, don't you think the market will tank too?

Or do you think that the charts you have been studying predict the future with respect to perhaps a swine flu pandemic preventing people from doing business?

I don't know. In pre-Lehman days, I would have loved to have your technical skills at analyzing the market, but now I feel like its all one big ponzy scheme that can crumble at a moments notice.

Edit to add: are you still chasing Irish Chic? Have you been able to make non-internet contact?

[edit on 3-9-2009 by finemanm]

reply to post by finemanm


Thats where you are wrong

Everyone loves to talk about "lagging indicators"

i.e. unemployment #1

Let me explain it again, because once I say it, it may make sense.

See when companies like mc donalds fire people, and then the market or that individual stock lets say goes higher because of that.. why do you think that is?

Ill tell you. Its because the stock market is a FORWARD LOOKING INDICATOR no matter what you heard on nbc nightly news or this message board (yes 99% of you will take offense to this for some reason).

Now, you are wondering why the stock goes up when they are firing people.. that is supposed to be bad right?.. Well, you are 1 STEP BEHIND i.e. lagging indicator

See, before mc donalds fire's their peepz', their stock will be going DOWN - once the stock goes DOWN - they will fire people

Now, once they fire and align their resources and $ etc. investors will BUY because they know now down the line HISTORICALLY mc donalds will turn this around xxx amt of ways and xxx analysts project the same thing etc.. all the way down the line in ANTICIPATION of the stock in or company etc. in the future going higher

I have been saying for a long time infact since january we would have positive GDP growth in USA in 2009 (althouh i did get this information from a lobbyist lol)... you should have seen the responses (and no i am not going to argue gdp numbrs reflect this and that so im not right in the end etc.. thats a loser arguement)

We "historically" see all these trends time after time in the market and it is up to the "pro's" or "big money" as you will read if you follow my posts better be able to take advantage of these things when it happens.. akin to me programming algorithms etc. that take advantage of xxx situation when xyz and abc happens

Hope that makes sense

That reminds me I havent talked to her in a while.. I think the deal was if we hit dow 9000 i was supposed to go up there and make her a woman or something as far as i can remember it in my mind lol
[edit on 3-9-2009 by GreenBicMan]

[edit on 3-9-2009 by GreenBicMan]

[edit on 3-9-2009 by GreenBicMan]

reply to post by GreenBicMan


So what? Lots of comapnies lay off lots of people to become more profitable. Their stock goes up. How is that any reflection of the overall US economy? See your type of thinking is EXACTLY what is wrong with corporate America and WallStreet and the US economy. What the hell do you think those people that got laid off are going to do now? They are UNEMPLOYED! They don't have money to spend into the economy. They more than likely will have to receive unemployment money from the government in the form of tax dollars which is really just your money and my money. Those recently laid off won't be able to go out to eat aka they won't be buying cheeseburgers and milkshakes at McD's anymore. The stock market is in NO WAY any type of indicator on how strong our economy is. You add value to the economy by mining it, building it or growing it PERIOD! Streamlining a business and laying people off just makes a company more profitable. But what the hell does that have to do with the strength of the US economy?

Remember Henry Ford? If he fired everybody no one would be able to buy his cars.

reply to post by Zosynspiracy


Im sorry you feel that way.

Thats all I can say my friend. I have explained myself well I believe and am not just stating opinion.

Like someone said early NOTHING matters if more and more people are being laid off or not getting hired again. NOTHING MATTERS! The only thing that happens is the responsibility of feeding, clothing, and taking care of the unemployed shifts from the private sector to the government i.e. you and me. We have a 70% consumption based economy. Maybe these things wouldn't matter so much 50-70 years ago when you could live off the grid and grow your own food and build your own home. But we are ALL intertwined and all these ripples effects everything and everyone.

reply to post by GreenBicMan


No of course you're not stating YOUR opinion. You're simply regurgitating hundreds of talking points and political BS/mumbojumbo thats have been spewed and spouted by many economists over the years. The US economy is OVER, DONE, FINITO unless we get back to producing what we consume. There is no way in hell our service based and consumption based economy can survive and maintain the same standard of living we are currently experiencing. You don't need a PhD in economics nor do you have to be a Keynesian or Hayekian or any other stupid follower to understand the basics of work and economics. That's the entire problem............useless sacks of hot air have complicated the economy so much so that 75% of the US economy is one guy sticking his hand in the next guy's pocket in order to make a living. Like I said you add value to something aka to the economy when you mine it, build it or grow it. Nothing else matters for long term stability and prosperity.

[edit on 4-9-2009 by Zosynspiracy]

reply to post by Zosynspiracy


Well, this is a "modern" economy where I dont have to do "dirty" work, I can pay some x amt. for them to do it for me as I contribute in my own way etc.

I cant help nor complain about the world we live in, because its as good as it gets for us. In fact, we should be so lucky to even be able to be having the internet, electricity, and a keyboard to type on.

I know we get "gouged" by the man, well, death and taxes brother sorry to say.

Which puts us back on topic of "going against the grain"

See, unemployment will prob be a problem till early/mid next year, when we start to see actual positive employment around late 10-early 11 - as of course most real analysts have been projecting (not karl d and friends) this will most likely happen with a VERY HIGH reliability factor. (.97 certainty or better based in information and historical alike)

Thats how that lobbyist knew this information from his private equity firm about the GDP - people REALLY REALLY REALLY good at math and the stock market usually = richest people in the world for a reason, its not throwing darts or guessing I promise you with all my hizzeart

[edit on 4-9-2009 by GreenBicMan]

[edit on 4-9-2009 by GreenBicMan]

I wonder when "they" will just start making up random numbers for the dow and stock prices, just picking ones that sound better, say...

We have pulled forward so much, relying on credit to finance the present, there is no way it can continue much more.

Outstanding consumer credit went from $128 billion to $2,525 billion, or a 1,973% increase - and this is only consumer credit, ignoring mortgages, financial firm credit, business credit, commercial real estate and of course government debt!

In each and every instance of recession from 1970 onward we have "pulled forward" more and more demand and created fake "prosperity" through the creation of ever more debt that we have goaded consumers to take on. By doing so we have crippled the ability of the economy to grow, redirecting as much money as possible to a handful of people and firms (commonly known as "banks" and other "financial companies") instead of directing that effort and money into productive enterprises such as building cars, television sets and similar items.

A Very Good Read

reply to post by Zosynspiracy


You have a very poor/misinformed view of our economy. Although, in some forms it is prob. much better than mine bceause I honestly dont give a dizzamn - you dont have to know anything about the economy to make money, infact that will prob hurt you because you are thinking like a "square" or a normal retail person when you should be thinking AHEAD

Think of the worlds BIGGEST CORPORATIONS IN THE WORLD

How many trade on the NYSE and how many are based in the USA and pay (or avoid lol) their taxes in the USA?

You should rethink your thesis, im not being hostile, but I think I have presented many real world applications to the the theory w/o being outright or openly bias.

reply to post by GreenBicMan


Who the hell said anything about dirty work genius? You think all the engineers, scientists etc. who are responsible for overseeing agriculture, mining, manufacturing are doing "dirty work"? You think all the college researchers innovating new products and new technology are dirty workers? Even with your holier than though attitude we as Americans should embrace and appreciate EVERYONE who is willing to work and be a part of the greater US economy whether they are the garbage man picking up trash or the PhDer studying nanotechnology. See that's exactly what minions like you fail to understand. It's not a winner take all economy..........we are all in this together and we will get farther working as a team and all playing our part than to have this attitude of "I'll pay someone to do that" while I sit back and reap the rewards. You're elitist uppity attitude is unAmerican, insulting, and infuriating. GROW UP!

why are you talking to me like that?

I am giving you good information and you choose to mock me?

Thats cool i guess brother, but *whatevz*

reply to post by GreenBicMan


That's the problem the "me" generation.
[edit on 4-9-2009 by Zosynspiracy]

[edit on 4-9-2009 by Zosynspiracy]