Last Wednesday, I wrote within the next couple weeks we could easily see 7000-7500 on the Dow Jones. If things continue to go as I think are possible based on my best guess, we should end today somwhere near the lows and then hit a short term low sometime next Monday or Tuesday at the aforementioned level. At that point, I would look for a 3-5 month rally into the 10000-11000 range. At that point I would put a bunch of limit sell orders under many of my positions because if things continue to go as I see, that could be the point where things go down for a while.
Once again, this is just my best guess. However, for the last couple weeks things have been going almost exactly as I thought would happen. While this is confirming my beliefs of the extreme danger our economy faces, what lies ahead is still to be determined. Nothing has been fixed yet, and if this is still the case a few months out, be very very careful. Hopefully, the economy will start to become stronger over the winter. If it does, the 7000's may be far into the rearview mirror, but don't count on it.
Besides the strong cash heavy stocks with good dividends, I am currently very bullish on gold/gold stocks, and very bearish on the US dollar and US Treasury Bonds. Gold may not have hit a near-term bottom yet, but I think is a very good play over the next 3 year time frame. In the same respect the Dollar and Treasuries have rallied hard recently. This may continue for the near-term, but I see them much lower in value a few years out. All of this is based on my best guess belief that things will not get better soon. For what it's worth, I would put this at about 30-40% likelihood of happening (I'm not talking exact numbers, but rather a low hit early next week followed by a strong rally, followed by a sell-off to even lower lows sometime next year).
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