Thursday, August 4, 2011
A brief review of bear market targets
The action in the market today helped solidify the case that the bear market rally is over and the bear market that began in 2007 has resumed. Whether or not this was the actual top to this bear market rally I think is immaterial. What is important is that people keep their wealth intact by getting out of all traditional investments, so that when the final bottom does come, people will have the money to capitalize on it. That being said, I want to briefly go over my target levels for the bear market low. My first target (which could very well be the bottom, let's hope it is) is below 800, and ideally at DOW 770, the 1982 low. If that fails to hold the next target would be the 1974 bear market low at DOW 570. If that fails we are likely looking at a move below 400. The target range there would be 40-386, the range of the 1929-1932 bear market. Whichever of these levels the DOW finds support at, I expect it to be undercut slightly in a capitulatory move to the final low before a new Bull Market begins. As I have stated before Banks are going to ZERO and I am sticking with that target.