A double dips will bring Dow back to the 6,000 mark.
I don't think US Treasury has any problem of paying the debts on time. Geithner can always borrow money from Federal Reserve that can simply switch on the printer and start printing.
On Wednesday, Dow closed almost unchanged with a 'Doji', but S&P dropped almost 1% with a solid red candlestick. If both the Dow and the S&P moved below the lower supporting trend line, this is another possible ending point for the mega wave B.However if prices do not move below the lower trend line, major wave 5 can continue to form mini waves 10, 11, 12 and 13 and can just drag on.
If there is a pullback from this level and if the magnitude is about 4% to 5%, about 500 points drop, it is also possible that this is a wave 6 pullback, Dow will continue with another up-trend wave 7.
I still believe that Dow is at the tail end of its mega wave B but it is impossible to tell when and where B will stop. If there is a way, the market cannot exist as there will be only sellers with no buyers.
The final journey is always exciting and very speculating. Risk is high and the return can also be equally high, stock selection is crucial.
Click 'On Staying Solvent' to read what Richard Rusell has to say.
The article (on staying solvent) is plain common sense and we couldn’t agree more. It also reflects our current thinking. Why anyone would want to stay in the market, when one major whack in the stock market would wipe out all gains is beyond us. There are always suckers. We hope you are not one of them. - editorial.
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