New York – If you watch Fast Money on CNBC TV regularly you might remember back in November technical analyst Louise Yamada said the Dow would be trading at the currant anemic levels. (In case you’re not familiar with Yamada, she’s runs her own firm and is one of the most widely followed technical analysts working today.)
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In fact it was on November 20th when she made the very bleak prognostication. She said “everything is going down.”
At the time it seemed like a lot of doomsday talk. In fact, Macke even joked that if you’re going to prognosticate catastrophe you should make it rhyme like this; “the bigger the pop the bigger the drop,” he laughed.
But 13 of the Dow 30 had already broken their 2002 lows. “if you start losing 13 of the 30 bricks in your wall, that wall probably isn’t going to hold up,” Yamada retorted.
And she was right. So what does she see going forward?
Unfortunately patterns in the S&P don’t translate into good news. Yamada sees a clear 10 year double-top and suggests we probably have further to fall.
“Now that the 2002 lows have given way we have further to go,” she says. “The first targets are 6,000 in the Dow and 600 in the S&P and the second target, I hate to say it, could be 4,000 and 400.”
To support her thesis she points to trends that happened immediately following the Crash of 1929. Wealth destruction didn’t actually occur at the crash. It happened after a bounce in 1930 and lasted well into 1933.
If you’re looking for a survival strategy Yamada says it’s important to be holding cash. “And if you get into this market make sure it’s with a trailing stop.”
Of course her thesis doesn’t take into account that the Hoover administration wasn’t nearly as aggressive as the Obama administration. Also Fed Chairman Ben Bernanke is a scholar of the Great Depression.
What’s the bottom line? Let’s hope this time history doesn’t repeat itself.
What do you think?
The bottom line is there are hundreds of analysts throwing out different predictions, probably based on their emotional disposition to negativity as well as desire to predict something different than everybody else. With so many analysts predicting different things, one is bound to roll the dice on the right number. She has no clue what’s gonna happen from here on out.
I think you amount of Obama pouring money into the economy will stop this freight train of economic disaster. It must run out of fuel and stop. This is like putting a wooden barricade in front of the trian sppeding at 100mph. We will have a Depression, people will again be trying to jump from wall street building, only this time they will not be able to open the windows. We must return to a time when we were more civil to each other and not so greedy.
The way it works is like this:
1. You make a wild guess
2. If it happens, your the world’s next prophet
3. If not, everyone forgets what you said anyway
I remember hearing a rebbe that was asked how he promises yeshuos.
He said (in a joking manner, I think): If it doesn’t happen, who will know. If it does, I got myself a “geshvoirene” chossid.
Can anybody explain as why the market (economy) is back to ’97 levels and housing is still strong gave back onle 3-4 years is it the goverment who dont let it fall I dont think so oh I just wish housing going back to ’97 prices
to #2 Abe,believe me that rebbe was not joking
because they know the truth about themselves
I’m sick of everyone blaming this on obama!! This is all clearly Guliani and Phil Anselmo’s fault. The defran bill of 1997 was one of the worst acts ever passed in congressional history!
I guess we are being taught by Hashem that it isn’t money first and G-d second.
It says in the Torah, “in the beginning there was nothing, only G-d.
I guess everyone will realize that in the end there is nothing only G-d.
Expert opinion does count and we better listen to them I am in the real estate business and I am dealing with a well respected Real estate appraiser from Williamsburg and he told me back in 2006 to sell everything that I have that is over leverged, he was advising me to run for the hills .Thank hashem I listened to his advise and I am okay now
She’s right.
The greatest low of the Great Depression came three years after the crash.
America’s economic success is bec. of capitalism.
In simple terms, capitalism is the notion that competition is good for business: Competition forces businesses to keep their prices fair and to constantly improve their product and innovate new ideas.
When businesses are run or owned by the government (ie, “nationalized”), that business’s competition is eliminated. Thus, the business’s prices will skyrocket and the business has no incentive to produce quality products or services.
To make matters worse, businesses that have been nationalized are funded by taxpayers. (For ex., did you know that in France, the tax rates are OVER 50%??)
Obama has just set forth his plan to nationalize 3 huge industries: finance, health care, and education (we’ll also be seeing additional taxes for “environmental” reasons–ex. a huge tax for cell phone use, among others).
This means quality will deteriorate, competition will be eliminated, non-government businesses (public and private companies) will suffer, people will spend less and businesses will innovate less. Meanwhile, taxes will continue to rise to support an ever-growing government.
So yes, IT IS ALL OBAMA’S FAULT!
“Of course her thesis doesn’t take into account that the Hoover administration wasn’t nearly as aggressive as the Obama administration. “
And what happened there?? Higher taxes followed by FDRs social spending programs which contributed to continued unemployement that made the Great Depression last into the early 40s when we were pulled out of it by WW2.
FDR gave us the New Deal and since The Obama is clueless he must be giving us the Raw Deal!
17,
Oh yeah?!? What has Bush done about this problem so far????? We haven’t heard from him in months!
all the fundamentals of the markets are gone, these predictions are a stab in the dark