Let’s get this out of the way.
S&P 500 Forecast
The S&P 500 is going down, at least to 650 and maybe as far 400. Take a look at this chart:
There are some scary things about this chart. First, there is no sign of support anywhere until 450. We’ve broken out of the double top, and volume is through the roof.
DOW Forecast
The Dow isn’t any better. Next stop, 6000 then 4000
So the question is, do I trust the charts, do I really believe that the markets will have to have dropped to 25% – 33% of their original highs? There are so many forces acting against the markets, it is hard not to trust the charts. Bailouts, scandals, and inevitable inflation have yet to have their effect on the markets.
Earlier today I wrote a post on Twitter, about inflation. The CRB is at its lowest point since June of 2002. In case you are not aware, the CRB Index is the far and away the best forecaster of inflation available. With consumer prices rising, and the fed printing money as fast as the presses can crank it out, inflation is likely coming, and when it does, its going to come on hard. Sadly, that’s best scenario we can expect. The worst scenario is along term stagflation.
Either situation is horrible for the market. I honestly believe we’re going to see the high side of my forecasts by the end of April.
Trade the trend, get short, make money. Here’s to profitable investing
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