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Pastimes : MELT-UP or MELT-DOWN: Cast your Vote
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To: J.T. who started this subject4/28/2002 4:19:35 PM
From: DanZ  Read Replies (1) of 361
 
Is it easier to predict where the market averages will be in 18 months, in 18 days, or in 18 hours? lol

My guess is that the averages will be higher in 18 months, but not even close to the highs from March 2000. The Federal Reserve has lowered rates significantly to levels not seen in years. I believe that these lower rates will eventually lead to a turnaround in the economy, which will lead to a turnaround in corporate profits, which will lead to a rally in stocks. The market typically leads the economy by at least six months, and I don't think it will take 24 months for the lower rates to transform into an improving economy. Of course if things get worse before they get better, the market could go down and then rally back only to today's levels in 18 months...but it looks to me like many sectors are bottoming now and I don't think the market has much downside risk from here. That said, the COMP is at critical chart support near 1700. It closed slightly below that on Friday but should have very strong support at the Sep lows near 1400. Something very bad would have to happen for it to get below that in my opinion. The worst scenario that I see is a drop to 1400 on the COMP and then a rally that exceeds today's level. And then again, the chart support at 1700 might hold and this could be the lowest prices we are going to see.

Best to all,

Dan
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