I might as well put in my 2 cents worth on this topic. One scenario not yet mentioned is 5 to 6 months of trading, between 7500 and 8500 (INDU). I think this range will be tough to maintain for that length of time, but is very likely for the next 2 to 3 weeks. The market wants the bears and the bulls to struggle a bit, and to make any TAs good some of the time, but not all the time. Furthermore, the longer it takes to drop to 6500, the less likely it will drop to 5500. By that time, the bears will hibernate and bulls rest up, for a few months, while the market oscillate between 6500 and 7500.
Next week, there should be a test of Thursday's low. If it holds, then up to 8000. I don't think this market has any steam to break above 8200 (on close), while it is grudgingly trying to break below 7,500 on the close. Something is keeping it above 7500 on closing basis. That 7500 floor is pretty strong support. IMO, it may only last another month. The break down to 6500 may occur next month, after very exhausting struggle. Then the doldrums will be with us for 6 to 12 months. I think 6500 is a very fair valuation of the market by middle of next year, and enough to remove unreasonable expectations from the market. |
