As usual, a big market drop got me interested in the market again. Above please find a very long term look at the Dow … since before the Great Depression (suggest clicking to enlarge). I drew the red line five years ago(!), and note how we’ve been bumping up against it recently. Also note how the green channel is intersecting it … for the longest time I thought we’d eventually keep following the green channel up through the red line, and we’d have a few more years until any sort of massive drop in the market because we’d be following the white channel. Now, I’m not so sure. I think there’s a possibility that we could drop to ~20,000, a 33% drop. If I were still trading, I’d be in cash.

Also, please note how I do this … I’m not whipsawing in and out of the market, but when the probability gets high that we could drop significantly, I recommend getting out. If the probabilities change, I’ll give an all clear. I’ve been right now since 2007 … every major turn. Would that it were that I had enough money to do this for a living …

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