Ken,
<< Now I have a comment and question for you. My regular readings and careful study indicate ... (1) If the major indexes are the same on December 31 as they are today, that will be a major accomplishment for them ... (2) I believe we will either test or break all major index lows for 2000-2001 before the end of the year ... either between now and late July or in September-October ... (3) DJIA 8,500 or lower, S&P 500 900 or lower and Nasdaq Composite 1,500 or lower are about where I think we are headed for lows this year ... possibly another 20% lower than those numbers ... >>
I agree that we'll look back on this and see that we are in a recession. I feel that the market is overvalued based on historical P/S and P/E and P/Book ratios, etc. However, I don't think that the recent lows will be broken to the downside. My opinion (FWIW) is that the market will tread water for a long time (3 - 5 years) and that eventually the fundamentals will catch up to the valuations. While the risk that the Nasdaq will fall back to 1,650 is clear, I suspect that it will find support at that level. A trading range will probably be established between 1,650 and 2,250 that will last until the fundamentals move the market higher. The drop from the Nasdaq peak to the low was about 68%. This is practically unprecedented. I suspect that the majority of the damage was done and that the market will bide it's time waiting to build up the fundamental base for the next real bull market.
I don't know what value my opinion is, but you did ask. The scenario you painted is possible and so is mine. Nobody can be entirely certain, IMO.
Dave |
