Friday, June 03, 2011

Probably should have Publicly posted this a while ago

I've been saying it since the end of January or beginning of February, but if I haven't told you personally, you probably won't believe me when the 'I told you so' moment comes if I don't make it clear now.  As I said earlier in the year, and I have stuck to my guns on this, the Dow Jones Industrial Average will hit 11,000 again before it reaches 13,000.  Personally, I think that the market's natural level is about 10,500, meaning that the market needs to fall 20% in order to truly normalize.  Coincidentally, the definition of a bear market is a market drop of 20% or more.  This means that the government's quantitative easing program has effectively erased or inflated away a bear market.  Since QE2 ends this month, expect market volitility (and when I say volitility, I mean both up and down, unlike analysts in the media), but a general downward trend towards the 10,500 mark.  Outside forces may prevent a complete drop to 10,500, but I'm still calling out the 11,000 mark.

No comments: