I continue to hear calls of the SPX going to below 600. Come on get real! Lets use a little bit of common sense. That's almost like saying the housing market is going to drop to 100,000 homes. Not going to happen.
Why? Just by shear volume & growth. If you look at the history of the SPX you will see that the lows are getting higher. You will also see that we normally don't have a Big Bear market until we have a new ALL TIME RECORD HIGH. When was the last record low, that was June 1877 at 2.73, how many was in the stock market then, not many.
Since 1871 the worst Bear market we have had was the crash of 1929, which dropped 84.8%. Since then there have been many regulations established that would prevent that kind of drop today.
The last Big Bear was from the ALL TIME RECORD HIGH of 1576.09, the SPX dropped 57.69% to 666.79 which was a bigger drop than the 2000 BIG BEAR which was from the ALL TIME RECORD HIGH of 1552.87 that was a drop of 50.50% to 768.63
So if we were to get to an ALL TIME RECORD HIGH of 1600 and went into a Bear market, it would most likely be a Big Bear if the SPX dropped 60% from that level that would put the SPX at 640.
But with all the retirement accounts that are now in the markets as well as other long term investment type accounts. I believe at this point the bottom will not go below 800, that would be about a 50% drop from a new ALL TIME RECORD HIGH.
Some people need to graduate from their ABC's and 123's and learn how the market really works. If your making big money using your ABC's and 123's then I applaude you, but I really doubt it's the ABC's/123's that are guiding the trade, there are most likely other TA indicators that are actually being used and the ABC/123's are rebillious attention getters, the key is no one else can understand them or do them right, why? Because the rules are very subjective and open to interpetation, that's the way they like it. They always have a back door, they are always right even when wrong, they have no historical data to back up their so called system. Why not, it's very easy to record historical data. It's what it would reveal, that their system is a fraud.
Yes there will probably be some responses to this post with some one line comments but I doubt there will be anything of any significants.
JMHO, Lindy
"Buy low, Sell high, stay with your system. If your system breaks fix it."
