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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: lurqer who wrote (8295)	10/22/2002 2:22:57 PM
From: lurqer	Read Replies (2) \| Respond to of 89467

The Twin Top Plateau – a SWAG In two previous posts, I’ve outlined the Panic to Mania cycle Message 18142540 and an oscillating plateau that may occur in the current decline. Message 18142943 What I would like to describe now is one of a family of scenarios that detail the plateau oscillation in the decline. If the panic intensifies and the Dow reaches 4900 next year (’03), then, IMO, a bounce that lasts most of the way through ’04 will occur. This bounce will take us up to around 6800 to maybe 7300. During the bounce there will be considerable talk about the “end of the bear” and when we will “reach the old highs”. New investors will be encouraged to put their money in the market because “the bottom is in”. Rising interest rates and a rising market will result in asset reallocation. And Bush will try to get re-elected. By late ’04 or early ’05, the market will peak and head downward. This time without the momentum from the fall off the peak, the market will bounce again, but from a higher point – around 5100 – in the later part of ’05. Then market will rise again. Many will hail the double bottom. They will discuss at length the fact that the second bottom is higher than the first so this “proves” that in ’06 we are in a secular bull market. Hence, it’s time to invest “for the long haul”. By late ’06 the market will turn again, and this time, never recover. It will plunge to Dow 2900 near the lower channel. Despair will reign. All the boomer’s LTB&H plans to retire wealthy will be dashed. Particularly sad is the plight of those “sucked in” during the brief ’03 to ’06 hiatus in the decline. This is merely one scenario for the decline to Dow 2900. The long term chart makes it clear that is where we are headed – unless you believe “This time is different”. The only question is: how do we get there? Or, put another way – Is there “fine structure” on the way down? It is possible to argue that the force of the decline is sufficient to carry us to Dow 2900 in a straight line, or if not a straight line then with only one bounce – the One Top scenario. Alternatively you could speculate that the oscillations will be more brief, leaving time for a Triple Top between ’03 and ’07. Some things remain fixed. We’re headed for Dow 2900. We’ll get there not later than ’08. In between is guesswork, and my best guess is the Twin Top Plateau. lurqer