The market has been correcting for a few weeks.
This is normal and healthy.
Investors and players always go to extremes. Too high and then too low and then too high again.
Asset allocation strategy indicates selling on the way up and buying on the way down. This correction is a message to do some buying.
To repeat
This correction is normal and healthy
In fact, it is what must happen. Corrections strengthen markets. They are no cause for despair.
The important thing is for earnings to continue to improve. Earnings are the most important thing. The value of a company is really just the value of earnings plus any real assets such as land.
I believe the correction has already almost run its course. However the road back to new highs will be long and slow. A period of consolidation may last for another six weeks. July looks good.
I still expect DOW 12,000 by Thanksgiving.
correction continues
ReplyDeleterecent Dow high was 11258 on 4/26/10
today we have already touched 9775 for a 13% correction
how far to a new bear?
falling below 9000 might be a new bear
8982 would be 20% decline
that may happen but I don't believe that would be a real bear....it should snap back from that almost immediately
but I don't expect that. I expect this correction to end soon.
price movements
ReplyDeleteonly sellers can make prices drop
only buyers can make prices rise
consider commodities
they are usually consumed
burned, eaten, used in construction
supply and demand for use
equities have other purposes
june 4 touched low of 9890 still higher than 9775 from May 25
ReplyDeletewas may 25 the bottom?
so are we seeing higher lows already?
next week may tell that tale
and I still wonder who the sellers are?
is it just the public being scared out by bad press?
or is it the big boys selling short?
was May 25 the bottom?
ReplyDeleteit sure looks like
we are up more than 6% from there
July is looking very good so far
ReplyDeleteBut the bottom was not May 25
and yet sometimes a quick dip like we had is just a head fake really
as of now it looks like the low was July 1, S&P down to 1011 which was almost 3% lower than May 25
ReplyDeletebut today we are already back up to 1070 almost 6% above the recent low
So how do we get to 12,000 by Thanksgiving?
all we need is about 100 points a week or 20 points a day on the Dow.
That doesn't sound so difficult.