Now that there is Federal Floor of 8000 in Dow Jones Industrial Average, what happens next?
Fred Day
Oct. 30, 2008

It is very obvious the Fed and the Treasury have drawn a line on the sand. They will not allow the stock market to fall below 8000. They have enough resource to hold the market there for a while no doubt. But what will really happen in the intermediate term – 2009-2010.

Analytical and quantitative models are showing signs that the market will most likely go sideways with an upward trend till the March of 2009 with sporadic sudden corrections as the remainder fear index gets liquidated. The market is not really out of woods but it cannot just go down in a straight line.

The new President in the oval office will have to make some tough decisions. The market will have to get accustomed to more ‘sharing of wealth factor’ or however you want to put it. Hedge funds will have to start hedging again. Private investment firms will have to go back to the basics – value.

The problem will come after March-April of 2009 when Dow retest 11,000. The economic down turn will worsen beyond imagination. The market will pierce through 8,000 and finally drop below 5,000. After that a base building period may extend to many decades with a slow but steady down trend just like the Japanese stock market.

Now that there is Federal Floor of 8000 in Dow Jones Industrial Average, what happens next?
Fred Day
It is very obvious the Fed and the Treasury have drawn a line on the sand.
READ MORE>>

Dollar’s sharp rally a counter trend bear market phenomenon? Is gold ready to test $300 or $3000?
Marla Guthrie
Dollar has rallied more than 25% in less than three months.
READ MORE>>

Close to 500 hedge funds worldwide ready to announce insolvency intensifying next week’s selling
Jennifer Scheldon
U.S. hedge-fund managers may lose 30 percent of assets to withdrawals by year-end...
READ MORE>>

The American auto sector can get nationalized within next three months closing the virtual door for foreign automakers – great investment?
Nathan Gulash
Chrysler announced that it would slash one-quarter of its white-collar workforce...
READ MORE>>

Higher long-term rates will create more devastating depression – a big lesson waits for Federal Reserve and the Treasury
Alan Hershey
The bond market is showing signs of tiredness.
READ MORE>>

Stay away from stocks, major stocks can have the same fate as AIG – nationalization is the only hope for big companies as depression goes deeper
Bernie Snyder
The Dow Jones Industrial Average is headed below 6,000.
READ MORE>>

MORE ARTICLES >>