This is looking more and more like "the" bottom. The universe, of course, will unfold as it will so we may need to go through this process at a lower value (say 19 for JDSU). But still, the signs of a bottom are mounting.
Now, since denizens of the stock market are supposed to be forward-looking, we better start anticipating the time frame and scope of the rally.
A picture is worth a thousand words:
lowrisk.com
I offer that not to suggest we're in for the same. No, the US banking system is robust unlike that in Japan. I offer the picture to show that bear markets often have two or more legs down. Within those legs, are explosive rallies called, "sucker rallies" in honour of those who inevitably assume the good times have returned. Most, having sold in the panic near the very bottom of the current leg, jump back in near the very top of the sucker rally. If wishes were horses then beggars would ride.
I give the rally 3 to 8 months. Then, we grind down again to the present or a lower level in the naz (1500?) and much lower levels in the S&P and DJIA. Then, we'll see real blood in the streets; then we'll watch the heads on CNBC talking about the final death of equities. (That, of course, will be as patently absurd as the opposite we got during the topping process.)
Hank's got his pick-up loaded up with equities right now, for the rally. When equities are declared dead, Hank'll have so many of them his low-bed will be buried, his spar tree and skid cats will be hooked on to big drags, and each of his logging trucks will be filled clear to the top of the bunks. Equities will be spillin' all over the show like an explosion in the sawdust heap.
Course, then they'll all tell him he's just a crazy man headin' for hell.
Hank Stamper |
