Donald Ingram's
Instablog
This one subject seems to be the
main topic of financial conversation on everyone's mind these days
- "Is this the end of the bear?" Short answer. No. To attempt to
find an answer we must re-visit history, there are remarkable
similarities between this bear and the Great Depression
bear.
The Great Bear collapse top was in
September 1929 and bottom in July 1932. Great Bear II topped in
January 2000 and bottomed in October 2002. Resulting in a collapse
of 89% and 40% respectfully (although the tech heavy NASDAQ lost
over 80%). The 1930's saw a rally between 1932 and 1937 as the one
between 2002 and 2007, with a secondary low in March 2003 as
happened in March 1933. In 1937-38 there was financial panic as
happened in 2007-08. The 1937-38 panic did not take out the 1932
low, however this time the 2002 low was taken out. Which gives the
impression that the current bear has much more potential for the
downside yet.
There is a prognosis from
Elliott Wave guru, Robert Prechter and
Kondratieff Wave cycle analyst, Ian Gordon who both predict a bottom of
1,000 - 1,300 for the Dow Jones Industrials. As to how deep this
one will go is anyone's guess. I suspect that the next low will
take out the recent March low by a fairly wide margin. Could it go
as low as 1,000 Dow? I doubt it. However I have this nagging
feeling that it may test that mark.
