THE DOT - if this turns orange or red be alert

Wednesday, February 25, 2009

The realative less bad version and the ugly perspective of DOW targets

First of all the DOW monthly chart on the left in log scale shows we might trade sideways for at least a decade around the 200 month MA like in the 70's ( that's unfortunately the less likely version). The point is though as we are heading for the big support around 6800 at a deeply oversold monthly MACD we are up for a severe upside consolidation starting very likely in March. The evidence is though that every big bear market in history has made a trough around 8 times trailing earnings and in the case of the SPX we might be heading for 100-200 within 2-3 years as the implosion of earnings will be continuing as the total collapse of the global financial system can not be healed anytime soon and the distress on governments will have similar magnitudes soon. A total collapse of the global economies is inevitable over the next years and they just buy time by inflating the world with worthless money but it will create a mini bubble soon as people might rather believe in miracles against all common sense as they cannot let go of the phony world of ever more .. which is not possible and history proved that over and over but we still want to believe that such a pathetic system is what we want - being the slaves of our banks.

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I am a professional independent trader