tyfighter3
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Post by tyfighter3 on Jul 9, 2015 0:13:27 GMT -5
A 6 month chart of the DOW stockcharts.com/h-sc/uiIf you notice at the end of Dec to the First of Feb the DOW made 3 lower highs and then fell 1000 points then went to a new high around the first of March and has made 3 lower highs since then. It looks like Big money is leaving this Market, 17600 is support but 17000 would be KEY suport, if it would go below that, who knows where it would end up at. The saying ( Go away in May) may have some meaning in it this year. JMO If you look at the current 6 month chart of the DOW you will see that the close is below the 200 day average and the 17100 is the next spot to check out and then 16400, but a 20% correction would be around 14500. CASH is KING
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tyfighter3
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Post by tyfighter3 on Jul 9, 2015 0:29:55 GMT -5
DI wrote a post just after mine and he was spot on also. Charts will help you in finding trends and reading the Newspaper will tell you if it's true or not. LOL
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Post by Deleted on Jul 9, 2015 13:14:51 GMT -5
Not to be sticky about the Mechanics of the DJIA, but Our research indicates that mechanically: Each 1,000 point bracket is break segmented in 1/4's.
That said 17,500 is near test 1, 17,250 is near Test 2. If those both are broken, then Capitulation Test 1 is 16,500 (a Reversion to a point nearly 15 months ago). If that is broken, then Capitulation Test 2 would mechanically speaking be at 15,250.
Mechanically speaking, 15,250 would be a Truth Test (roughly 2,000 points Higher than the All Time High which was hit as the markets went into the 2007-2009 debacle).
If that fails, then 13,500 is the line which the Reality Check Test would be touched.
Why is any of this important and why does any of it matter?
Because the real question, the unspoken question is: Did companies actually shore up Moral, Ethical and Financial issues which existed Pre Crash? Or Did they just get better at hiding the BS that was around then?
And If Companies did shore those things up; the Reality is that the FED has screwed the pooch for many years by shoving ZIRP (and many other things) down folks throats..
And if that is the Reality, then the truth is that the FED is responsible 110% exclusively for the continued sluggish GDP reads, and that Inflation is as many FED reports have indicated been artificially suppressed for over 7 years..
And what that would indicate is a very ugly reality that no one wants to either hear or even entertain as something that could ever happen...
Folks need to dust off their memories of the last major round of inflation; and ponder the truth that was there: The FED nearly lost control of inflation during that go round... And that go round was during the very early stages of a "new" Bond Bull Market that emerged after a 40 Year Bear Market in Bonds...
This Bond Bull Market has lasted far longer than any other, and has ballooned far beyond anything which even Market history can express (at least in the last 200 years), the indications that presents are at the very, very least worrisome..
The Longer the Fed waits, the worse things are going to be for them in trying to contain the pressure which has built up over the past 7 years.
But hey, what do I know, right? I just study math, historical data, current data and what is actually transpiring...
( And Thank You for the nod tyfighter3 )
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tyfighter3
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Post by tyfighter3 on Jul 9, 2015 17:18:28 GMT -5
Your wecome DI.
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tyfighter3
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Post by tyfighter3 on Aug 19, 2015 23:16:06 GMT -5
Isn't it amazing how things trade in ranges. Is the trend still down or will the DOW hold here at 17200? I think we all know where it's headed if it don't.JMO
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ModE98
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Post by ModE98 on Aug 20, 2015 9:59:35 GMT -5
Looks like the trend wants to go lower. There does not appear there is much news to support any change of direction to the upside.
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tyfighter3
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Post by tyfighter3 on Aug 20, 2015 10:26:59 GMT -5
Mod, wouldn't it been nice to see the trend when the market was 18000. Wouldn't it have been nice to see that value and the fundamentals where not in line. Wouldn't been nice to see that commodities have a bigger picture as to what happens to us around the World. AND wouldn't be nice to have raised enough CASH to be ready to be able to pick up some mighty fine companys at bargain prices. Charts help you to this. JMO
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Ombud
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Post by Ombud on Aug 20, 2015 10:29:10 GMT -5
SPY 203 (17100 on the Dow) would be the 5% correction point. Getting close. We'll hit it as it corrects 5% at least once a year
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tyfighter3
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Post by tyfighter3 on Aug 20, 2015 10:57:35 GMT -5
There is no growth in the World and I don't think that the world banks have enough money left to support it any more. JMO but I think 20% down is more inline. I hope I'm wrong but if I'm not at least I will have enough cash to make it worth while.
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Ombud
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Post by Ombud on Aug 20, 2015 11:08:07 GMT -5
Only 25% cash after 2 limits crossed b4 I could cancel GTC orders (there went 15% of cash - 5% to SPY, 10% to SCHB -- these are core holdings in legacy account not to be dispersed to GKs until I'm dead & they've graduated college).
Meant to cancel last night but packing car to take GS1 off to college
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Post by Deleted on Aug 20, 2015 13:23:17 GMT -5
Ombud ModE98 tyfighter3
I would like to bring the following back up:
17,500 {Near Test 1 For Strength} On The DJIA has been broken 8 times in the last 4 weeks; those were on: 7/27, 8/6, 8/7, 8/11, 8/12, 8/13, 8/14, & 8/19.
17,250 {Near Test 2 For Strength} has been broken today (8/20) and the DJIA is currently trading at 17,099 {2:14pm}.
So mechanically speaking {according to Our research} the Down trend is established & confirmed {near}, thus 16,500 {Capitulation Test 1} DJIA becomes the "floor" to look for to see if the DJIA stays above, or touches & bounces along or if it also is violated.
Right now it is not looking so good for an entrenchment around 16,500 (meaning that it looks like that level could be violated).
Also another point of note; at this time the DJIA has gone below it's worst closing level of the year (Jan 30th, 2015 E.O.B @ 17,164.95) and is currently (-4.08%) on the year.
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ModE98
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Post by ModE98 on Aug 20, 2015 13:33:10 GMT -5
D.I., you predicted this some time back (In fact, several times). You are now annointed "Chief Guru"!
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Post by Deleted on Aug 20, 2015 18:37:50 GMT -5
ModE98 Ombud tyfighter3
Well, we could call it "prediction"; or we could call it what is was: Very shrewd due diligence using all available tools at Our disposal.
Based on all of what We have and do track, the way We do, Our Models paint a potentially scary picture for the markets, which has so far tracked as We had said it might prior.
At this juncture, that would be premature. Anyone can get within a couple of degrees of "correct" to a point, sometimes.. The real question is: from here, how close does what is yet to unfold track to what We have prior stated We thought would track?
Though We will admit that We do find it interesting that, so far things have tracked as they have, given that We started speaking to this long before any "PRO", Media Maven or Analyst even started to and in fact when all of those were proclaiming that nothing like this could happen..
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Post by ModE98 on Aug 20, 2015 19:44:57 GMT -5
The current outlook is not good..........how far will the Dow FALL? "The wheel of fortune spins, round and round she goes, where she stops no one knows" stockcharts.com/h-sc/ui
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Post by Deleted on Aug 20, 2015 21:42:54 GMT -5
ModE98
If you look at the volumes (chart provided by ModE92 in post #77 shows this nicely); there is some information which is We think telling.
Looking at the 2007-2009 crash (We have used 2007 as the start repeatedly based on what volumes and moves intraday indicated; which is namely the issues began to start to unravel in 2007 even as there was a bit further of an extension on the DJIA):
One can see that volumes (shares exchanged intraday) began to climb persistently starting in April 2007. Following along, one can see that Volumes peaked at 2,081,690,368 shares traded on Feb 24th, 2009. Then volumes tapered off though elevated, with a spike during the period between Aug 4th, 2011 through Aug 26th, 2011. After that Volumes began declining; until Aug 28th, 2014 at which time they began to climb..
Today's Volume (Aug 8th, 2015) of 470m + isn't anywhere indicative of any sort of Capitulative Event; though it does continue the climb of volumes.
Now, using the same chart and looking at the depth of the drop between Oct 4th, 2007 (Pre Crash High Intraday DJIA= 14,010.41) to March 10th, 2009 (Crash Bottom Intraday DJIA= 6,546.61): One can see that the drop was 7,463.80 from pre crash high to crash bottom.
Extrapolate that to Present and the High Point would be DJIA 18,351.36 (DJIA All Time High - May 19th, 2015 E.O.B); so taking the full crash drop off of that would seem to peg a possible "bottom" in a full out slide at:
DJIA 10,887.56
However, from a purely Mechanical standpoint; based on prior occurrence and repetition, the prior High (pre-crisis) in theory should be the rough bottom and that of course was at:
DJIA 14,010.41
So; Our Models indicate that if the "event" has in fact been underway for a bit that the DJIA could shear another:
2,980.28 to 6,103.13 (or more, don't forget the damage yet to be wreaked by the way over extended Bond markets)..
Very scary stuff, unless you are positioned properly.. If that is it comes to pass.... And the "event" is {A} Underway & {B} Goes Full Blow....
Question folks have to ask themselves is: Do they want to find out, or do they want to wisely seek at least some shelter; until a better picture emerges?
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Post by ModE98 on Aug 21, 2015 15:04:06 GMT -5
Shake out day for weak holders of the more speculative stocks. Taking a beating. Looking more like a bear market is forming. But, how long this time? (Weeks, months, or a year or more)?
Again, the market action was called some time ago by D.I. He spends the time to analyze the market and calculates potential moves. Many of us do not have the time...but it's his full time job with his options trading. Good call, D.I.!! (Give credit where credit is due).
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Post by Deleted on Aug 21, 2015 20:49:02 GMT -5
ModE98 an anyone else who dares read,
Well, one could look at some known historical information from waaay back, to try and at least get a potential gauge of what could be lurking, just out of sight.
If one was going to try to do this they would have to look at 2 things; which are:
{1} Bonds {2} Equities Relation To Bonds
More specifically, when was the start of the last Bear Market in Bonds?
Well the answer to that is roughly 1941. This can be ascertained by a couple of widely published facts which are:
{A} The last Bond Bear Market lasted 40 years; & {B} The last Bond Bear Market officially ended in 1981.
So with that in mind what does the Historical Record have to show folks?
Well this:
From Nov 7th, 1940 until April 28th, 1942 The EQUITY Markets were in a BEAR MARKET; which was a period of 17.9 months and saw the S&P 500 decline by (-34.42%).
Here are the interesting notes from the above: {A} The Equity Markets began to decline BEFORE the Bond Markets dove into a BEAR MARKET & {B} They did so a few months before the start of the last Bond Bear Market. For Historical context, the Equity Markets sliding into a BEAR, followed by the Bond Markets sliding into a BEAR; happened PRIOR to Dec 7, 1941; A Day Which Resides In Infamy.. Yet, the reaction to that day (the US entrance into WW2) actually helped to pull the Equity Markets out of a Bear.
Have We caught your attention yet? Ok then. Why do We bring the above up?
Well, because of what is going on, what has been going on for quite some time.
The Bond Markets are EXTREMELY overhung. The Bond Market has been in a Bull for OVER 34 Years; one of the Longest, if not the absolute Longest Bond Bull Markets in tracked history. And at this point there are TRILLIONS of dollars residing therein, receiving very close to ZERO Yields. Even if you bought your nifty Bonds 2 years ago, you will never make your money back (Face + Premium Over Face). That is unless you can find a sucker to buy them from you on the Secondary Market and that will get very tricky in the not to distant future..
How can We dare say that?
Because, simply put - When Interest Rates go up, Bond Prices Fall (Price & Rate are inverse of each other). And Short Term Rates (those that the FED controls) affect the ENTIRE YEILD CURVE from Near to Far....
And the Bond Market? It is just a HUGE W.M.D. waiting to go off... And when it does, good luck finding a sucker to buy your overpriced, under yielding Bonds...
There is no way We can even be in the realm of sanity, is there?
Well, all you have to do is go back to the historical record and do just a smidge of digging; if you do you will find something very interesting, if you look under the right rocks...
Those rocks are: LARGE CAPS & SMALL CAPS, at the point of a PRIMARY COUNTER MARKET REVERSAL (EQUITY/BOND)...
In the early 40's, Small Caps withered, Large Caps Blossomed at the start. In the early 80's Large Caps withered, Small Caps Blossomed at the start.
Basically, when Bond Bear Markets begin to form, money seeks shelter from danger (small caps) in "Safer" Large Caps. Not surprising, in that while Large Caps aren't sexy, they are typically far less volatile, giving the appearance of safety...
When Bond Bull Markets begin to form, money seeks opportunity (danger) and "safer" doesn't pay as well.
Initially though in either case pretty much EVERYTHING gets slammed, this is of course because the Markets (usually the Equity Markets) are seeking to re-price the valuations based on what can be seen much more clearly as the turn begins to really form; which interestingly could have been seen much sooner if one had been looking close enough...
Ever wondered how it is that there are just names that folks just "know"; like E.F. Hutton, Peter Lynch, J.P. Morgan.. The directly above is why, they are folks that looked closer, sooner than others, acted in ways others thought was insane And made a killing doing that; over and over and over again...
Well not be to rude; We started telling folks over 3 years ago that they really would be wise to start building cash, We mentioned that there was more going on than even We could surmise..
This could truly be the start of something really nasty, something which has been in the works for far too long..
As We said before at this point the only real questions: Is It? How Long Could It Go On? How Much Will It Hurt Financially? And Do You Really Want To Take The Chance That It Isn't And Find Out The Very Hard Way?
Old Adage Goes: "Danger Can Be Felt, Like A Cold Chill; But Oft & Most Often Ignored: But All Truth Been Told Small Caps Are The Canaries In The Gold Mines Of Old; Yet by The Time You See They No Longer Sit On The Spindle, Your Hopes Have Long Since Dwindled"
Small Caps are really starting to show the signs, but is anyone listening?
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Ombud
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Post by Ombud on Aug 21, 2015 21:53:32 GMT -5
♤ Small caps now off 10% (Canary in the coal mine) ♡ SPY off 7.5%; 10% drop at 192.40 ◇ SCHB (Broad market ETF) off 7.7%, 10% drop at 46.836 ♧ Gold off 8.96% from 52 week high
Dn think they moved in tandem
At any rate, time to shift gears after taking profits .... pondering how to trade this market (that I'm not accustomed to)
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Post by Deleted on Aug 22, 2015 4:55:43 GMT -5
Ombud
Take these two from your list:
Small caps now off 10% (Canary in the coal mine) Gold off 8.96% from 52 week high
Toss these 2 in to the assessment:
DJIA is down (-7.65) on the year and is now off of the All Time High Set on May 19th, 2015 by (-11.49%) Oil is down 62% from it's high last year of $107.26 per barrel last year.
Consider the following:
Some large caps actually started flagging towards the end of last year; with the number of them hitting 52 week lows gaining momentum starting in Jan of this year. The large caps with the most "interest" have as of lately really started to show weakness.
Small Caps & Oil Are very interest rate sensitive.
Gold is great as a potential inflation hedge, but suffers under a strong Dollar.
Large Caps look less appealing right in front of "major" events; like The First Interest Rate Hike in a series and, You guessed it right around the start of A Bond Bear market.
What is throwing folks is that according to the conventional methods and thought, inflation does not seem to be anywhere to be found. However, the answer for that can be found in the St. Louis FED report form a year or 2 ago; in which the ST. Louis FED told everyone that when they ran all the data they found that in fact the FED Reserves ZIRP policy, combined with all the T.A.R.P.S. actually were responsible for artificially suppressing inflation on the order of something like 30% per annum, all the way along. That report went on to say that had the standing FED policies not been pursued that Interest Rates would have been running at a nominal 4.5 to 5.6% during the course of the period from mid 2009 to the date of the reports publication and that inflation would have actually been running at a nominal 2.5 to 4% during the same period, with an average GDP of a meager 1.5 to 2.5% again in the same period.
As to what or how to trade? Anyone's guess at this point.
But the S.O and I? We are tactically buying the Top End of the Upper Right Quad in the Options Chains at the farthest Out Expiry at present.. What that means in plain speak is that We are looking at the Deepest OUT OF THE MONEY PUTS We can find and buying a few contracts here and there: And that We are Specifically looking at those in the Jan 2017 Expiry. (We also are looking at possibly looking at the Deepest OTM PUTS in the SPY DEC 2017 chain also; but haven't yet acted on anything there)
Why So far out and why so far OTM? Well so far out due to the fact that those should provide a chance at better pay offs with a tad less volatility and as to why So far OTM, because they are cheap per contract, so one can get big bang, for small bucks.
And what all that means is that if We are to it put bluntly, wrong and the Markets shoot to 100,000 DJIA, while We would lose any capital risked, the amount wouldn't be that much.
To those actions We will try and keep folks informed in Our Thread. We have played tight for years, and well now might just be time to start looking to go hunting for big game on the cheap in the Options Market... But, with a careful tact to total risk..
In a Nutshell, now may be the time to start buying puts, for profit; not protection.
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tyfighter3
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Post by tyfighter3 on Aug 28, 2015 11:27:06 GMT -5
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Post by Deleted on Aug 28, 2015 12:37:22 GMT -5
tyfighter3
One of the most interesting points in that article is "the unusual V shaped rise".
Though, that is in reference to last October's action; it does allude to the fact that it is very rare for a Strong Market movement down to immediately reverse and sustain such a reversal.
Hence; more oft than not V shaped formations in a chart are, considered a bearish indicator.
And the action on the DJIA on Wednesday, formed a V pattern within the DJIA chart.. Just a thought.
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tyfighter3
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Post by tyfighter3 on Aug 28, 2015 22:25:57 GMT -5
The V formation is the thing to trade in a down market. It will give you half of what the spread is from the top to the bottom V or more if you let it set up. I've talked about this on my Thread on Investing Perspectives.
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Post by ModE98 on Sept 17, 2015 13:55:26 GMT -5
www.finviz.com/quote.ashx?t=OPKBelieve OPK could get "interesting" as the year plays out. Added a few shares @9.85 a few days ago. Plan to build a "k" size position if price remains low through EOY. Believe the long term is very promising (1+ yrs.). Hope the thought works out.
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Post by ModE98 on Sept 18, 2015 15:13:19 GMT -5
stockcharts.com/h-sc/uiNow what? Start of another leg down? Too turbulent to get a sense of true direction. A retest of recent lows would not be surprising. Believe markets need a few days to make a readable attempt at establishing a near term trend. This is why charts have good hindsight, and only a speculative hint at possible upcoming direction.
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tyfighter3
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Post by tyfighter3 on Sept 18, 2015 20:47:39 GMT -5
MOD, What's promising ( 1 year from today)? Maybe when we and Europe can get their refuge problem under control before it consumes them and our economy's from going somewhere it can't come back from. The unrest that will be for years to come. Europe right now should round all of the refuges up and march them all back to Syria and before you put them back across the border you give them a gun and bullets and tell them now fight for Your Homeland. Here's your trend for going forward.
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Post by Deleted on Sept 19, 2015 3:01:56 GMT -5
ModE98
Our take on things at present is thus:
The Markets shot themselves in the foot, by going all gung ho on the down bent (needed yes, but..) to try and ensure the FED wouldn't raise rates.
The FED shot themselves in the foot by catering to, the whim of the down bent the Markets tossed...
The fact the FED didn't raise rates, is being taken {at first blush}, as confirmation the economy is doing crappy and is on the verge of collapse..
Truth is, the economy is stronger now in many respects then it was prior to even 2004. (though from past experience I know that my read on historical occurrence will be straight tossed under a bus, as is usual}.
Now the risk of unavoidable Moral Hazard coming to the forefront has jumped exponentially. Things are bound to get very frantic and not in a good way, at some point. The only question now, is when..
When it does, folks will wish they had an armor plated umbrella, cause when the bricks of the house of party on ZIRP forever crumbles, folks will need one so they don't get hit by the falling bricks of folly..
Us? LOL, We are in Full on Hedge Mode... Setting up to make sure that We have Covered Our A***... While still being able to make money.. But, Our Stratagem, has contingencies for several Hypothetical "It Could Never Happen Scenarios" and Our Models have lit up in such a way as to prompt the enactment of moves which lay the framework for one such hypothetical scenario..
As such, We are acting in accord with the contingency planning indicated.
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Post by ModE98 on Sept 28, 2015 15:50:31 GMT -5
stockcharts.com/h-sc/uiAppears a good possibility of testing recent lows or worse. Events will drive the action as usual.
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tyfighter3
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Post by tyfighter3 on Sept 28, 2015 16:09:09 GMT -5
MOD, the trend hasn't changed. JMO but yes we will test the lows and if that doesn't hold, be prepared to see 12000.
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Post by ModE98 on Sept 28, 2015 16:18:01 GMT -5
Prepared to ride out any storm.....hope it does not turn out too bad.
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Post by Deleted on Sept 29, 2015 10:57:51 GMT -5
tyfighter3
Your clarification of your thinking is greatly appreciated. So now we have two thoughts fully out there for all to see.
You are thinking that in a full breakdown the DJIA could hit 12,000; and Our models indicate that the DJIA could peg the low DJIA 9,000's.
So, the thoughts peg a full on collapse at some where between -4k and -7k from current levels on the DJIA.
That type of collapse would be more dark days and lots of worry for many people. While hope is not an investment strategy; I am fairly certain that you, like Us hope that the worst we think could happen does not come to be; or even worse than what is surmised could be the worst case..
There is the rub, though: things never really get as good as one thinks they might, though things can always become worse than one thinks they may end up.
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