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Financial Markets Analysis - Stocks Bear Market Near Bottom?

Stock-Markets / Stocks Bear Market Mar 08, 2009 - 09:37 AM GMT

By: Nadeem_Walayat

Stock-Markets Best Financial Markets Analysis ArticleStock Markets fell to fresh bear market lows with the Dow Jones Index now fulfilling the original target for the bear market low of 6,600 as per the analysis of 20th Jan 09 as illustrated by the below graph.


Februarys updated analysis confirmed that given the rate of decent the Dow is increasingly targeting overshoot towards 5,700 to 6000 by July 2009. However this trend remains a secondary overshoot target to the original expectations. Having now fulfilled the primary target of 6,600 the next phase of the strategy is therefore towards accumulating on buy price triggers in advance of what I consider will become a multi-year bull market, which appears contrary to many analysts such as Pretcher and Schiff that continue to see fresh bear market lows during 2010, regardless of any rally. The bear market low targets range anywhere from 5000 all the way down to 400, depending on how bearish the analyst is, as there do remain convincing arguments for the continuation of the bear market when one considers the accepted assumption that stock prices will revert to below the mean in terms of price to earnings which continue to contract.

However, Bear Market bottoms and initial uptrend's are not born out of good news, that ONLY becomes apparent many, many months AFTER the event.

In Summary - My Primary target for a bear market bottom has been fulfilled, the secondary overshoot targets a possible trend towards 5,700 to 6000 with a continuing time window targeting mid 2009. The next phase for the stock market forecast for 2009 is for stocks to enter a multi-year bull market amidst prevailing gloom and doom economic data and press headlines that initially targets a 30% rally form the lows into December 2009, i.e. as per the original analysis of 20th Jan 09.

Your analyst positioning for a bullish spike higher.

By Nadeem Walayat
http://www.marketoracle.co.uk

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Just as the Obama Administration launches a triple tirade of new initiatives — a record stimulus package, a bigger round of rescues, and the largest deficit financing of all time …

Just as the Treasury Department doubles down on its bailouts for sinking giants — Fannie Mae, Freddie Mac, AIG, General Motors, Chrysler, and Citigroup …

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5. Subprime Eastern Europe to Bankrupt Western European Banks

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Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 250 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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