Try studying the graph of the DOw Jones form 1980 to Today.
finance.yahoo.com...
It forms a classic TRIPLE TOP FORMATION. The left shoulder was long ago completed. The head was completed by the Credit Crunch. The right hand
shoulder is not being completed.
For a crash to take place, two things must available:-
1. A blind panic setting in
2. Enough people in the market to panic to shift the market enough.
On this basis, a crash is likely at some time in February-March and in May 2010.
With Britain required to go to thepolls by 3rd June 2010, some things possibly able to crash the market...
1. Tuesday's vote in UK House of Commons. If the vote for proportional representation is carried, it means that if the Tories don't outright win,
Labour and Liberals would combine in a post General Election to keep Labour in power. Result? UNending borrowing and bond sales. With that ahead,
investors in UK bonds might start selling hard, causing a fiasco at Government refinancing and a sharp de facto rise in yields, resulting in a
crash.
2. UK Government does giveaway budget to get the voters in March. Panic as the haenous budget deficit is clearly not being tackled, sharp sell off in
bonds. Loss of assets triggers new bank failure and with the Election days away, Gordo promises to bail it out at any cost, triggering whole new
cycle of crash.
3. New Greek budget fails to meet IMF hopes for deficit tackling. Moody's and astandard & Poor downgrade Greek bonds, resulting in panic and
crash.
4. With Greece on the ropes, Gordo's budget continues to run out of control. Standard & Poors and Moody's rerate UK bonds down from AAA to AA -
panic selling on market as peopel realise that he can no longer finance, result crash.
5. New terrorist incident.
6. Iran proudly announces that its scientists have achieved 50% enrichment on 11th. Israel goes to war days afterwards triggering at least what is
perceived to be WW3. Result? Crash.
7. Figures on Christmas shopping and recovery revised or updated with ones showing recovery is not slow but non-existent. Result CRASH!
8. Selling that has brought DOW JONES down to 9900 is perceived to be "someone knows something" as there is no "dead cat bounce" or retracement,
but it is persistent selling.
Either way, there is no way out of this box other than a crash in the near future. ANd when it does, the market will fall to about 4400 or lower
within a few weeks.
[edit on 9-2-2010 by aristocrat2]