Stock Indices

Warning! The forecasts you're about to read are controversial, and many will say I have lost my mind. No problem. Many have said the same about me numerous times in the past but the forecasts I speak of today are based entirely upon my proprietary trading models that... have successfully guided me and the investors that have followed me through every twist and turn in the economy and markets... since I developed them in 1982. Words: 895

The probability of a move greater than 5% to the downside after a confirmed Hindenburg Omen was 77% [conversely, 23% of the time no significant market downturn occurred] and usually took place within the next forty-days. The probability of a panic sellout was 41% and the probability of a major stock market crash was 24%. The Omen was activated on the New York Stock Exchange on August 11 so the probability is that we will see a steep market decline sometime in September. Words: 871

The next decade will surely be especially turbulent, because that's when markets and politics will sort out what the inevitable train wreck in the US entitlement programs will look like. Words: 713

My old friend, Bob Prechter, is talking about Dow 400. I used to think this was an absurd joke. I no longer think it’s a joke. The ultimate result will be a primary bear market shocking in duration and extent. Words: 524

The market is currently slightly over-valued now which is reasonable since stocks offer a much more attractive return than bonds due to low interest rates. Eventually, however, interest rates will get to levels of at least 4% (which is the minimum normal rate on interest rates) and that would justify a P/E closer to 15. I am no prophet but if I had to guess, I would think future returns will be somewhere between Bogle's and Shiller’s estimates, i.e. between 8% and 10%.

Investors have a short memory, in 1995, the DJIA was around 4000. Today our economy, it could be argued, is actually weaker than it was back then. Words: 427