<<I am in the camp of a fast and furious run, maybe two to three weeks (2020 target), and then resumption of the decline into late June for a target of around 1750 or so followed with another "fast and furious" ramp in July early August, followed by another major bloody September.>>
Zeev. As I said earlier, I much agree with the basic scenario you painted as being the most likely with relatively proportionate numbers on the SPX, INDU and NYA.
However, in reference to the crash in 1987, and I agree that valuations based on P/Es are not nearly as extreme now, the possibility of a negative 'financial-event' in September, October or anytime is probably far greater than in 1987. While a crash right now is unlikely ... Elaine Gazarelli hasn't blown the whistle yet [g] ... we probably should expect the unexpected.
And I am saying this not from a TA view, but from a fundamental macroeconomic view. I strongly believe the US and world economy is much more fragile than anytime in the late 80s, and that given some flash/ignition source, we could be in deep crap in a hurry - almost anytime.
There are absolutely huge macroeconomic imbalances in multiple categories relative to anything I have read about back to Tulip-mania in the 1630s ... and the fact that there are multiple economic categories out of balance makes it all the more dangerous, for there exist more variables to ignite things.
1. There is a housing bubble in the US, although probably not as extreme as other categories.
2. Total Household US Assets as a % of Household Liabilities are the lowest (quarterly) dating back to at least 1955.
3. US Household Liabilities As a % of Net Worth were at a new record (through 2004) back to 1945 at least.
4. US Households: Net Financial Investments (in US Dollars) are the lowest since 1946 with the brief exception of 2000.
5. US Exports are lower than US Imports (in dollars) by a greater margin in dollars (and by percentage) than any time previously. And the rate of change is growing quickly in favor of imports.
Add in continued negative US real interest rates in the US, hiring improving much too slowly (and in the lower wage categories mostly), very slow worker income growth, an administration and congress on the Potomac who have shown almost no real intention to either reign in spending or fix social security or medicare, the excesses at Fannie Mae/Freddie Mac ... and anything else I might have forgotten - add that in as well. ................... Combine all that with an American investing public who largely have no clue regarding these true economic facts of life ........ and there is more danger than most people realize.
I am not predicting that we will have a crash ... but the overall complacency of Americans regarding their way of life relative to the real dangers and imbalances in the world makes almost anything possible at any time.
At least that is how I see it.
I am ready to cover all my short positions come Monday, and get long some stocks (and eventually gold again), but I will not assume that the market will not gap down on Monday and keep going for a while. I do not think it will happen, but it could.
Ken Wilson
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