Twitter   RSS   Email  

 How the Global Economy is Dependent on Christianity

 Why America May Never Recover From the Recession

 Save Money Homeschooling

Where is the Market Bottom?

By: Steve Johnson

7/15/2008 - 18 Comments

Now that Bernanke has admitted the financial markets are under heavy stress and we are officially in a bear market, where is the market bottom?

As an investor, spotting the bottom is very important. You don’t want to buy when the market is still falling, just like you don’t want to catch a falling knife. The best time to buy is after the bottom, but who knows where that is.

Dow 11,000-10,000

As of today, the market is now under 11,000, so we have already reached this range. At this point the financial markets are still under a lot of stress and yet to report billions of loses for Q2. If the federal reserve does not drastically increase the interest rates, then inflation will further reduce the value of the dollar, which could cause the stock market to increase even though it will be decreasing in value relative to the value of the dollar.

Dow 10,000-9,000

The consumer price index is at a 16-year low, which is eventually going to reduce the profits of the retail industry.  The auto-industry is in crisis, pulled down by the housing market collapse, as people can no longer get home equity loans to purchase automobiles.

Dow 9,000-8,000

I wouldn’t expect to see this range unless the unemployment rate rises above 7 percent.  Even thought wages are not increasing and inflation is further reducing purchasing power, many people still have money (or credit) to spend, which will result in profitable businesses.

Dow 8,000-7,000

I don’t expect to see this range unless the dollar collapses, which is becoming more and more possible as the OPEC nations are talking about moving to a different currency to use for oil transactions.  The speed at which the market could drop is also a consideration. If the market suddenly drops, it could trigger panic selling – which could devastate the global markets as stocks are oversold.

The future is uncertain as every major market in the world is now in Bear territory (down more than 20%).  Where do you think the bottom is?

Copyright © 2019 All rights reserved.

Crash Proof

Peter Schiff has predicted the economic hardship more accurately then any other economist in the world in this book. Everything from the housing crash to the credit crunch to the stock market. Peter has a plan to help you servive the crash. Peter explains why the Wall Street investment firms are still trying to sell you stocks, and was the house prices are likely to continue to decline for years to come.

Empire of Debt

Many Americans have resisted the notion that their country is an imperial power. The idea seems to contradict the values of the Republic and its Founding Fathers. But in Empire of Debt, prominent financial analysts Bill Bonner and Addison Wiggin argue passionately that not only is the United States an empire, but it is also one whose end is coming soon.

U.S. Manufacturing: The Engine for Growth in a Global Economy

This volume provides a comprehensive analysis of the essential role of the manufacturing sector of the US economy. The increase in the relative importance of the service sector and the globalization of manufacturing has tended to dull the image of US manufacturing....This volume contains much useful data that has been condensed into tables and charts to provide support to the reader without interrupting the flow of the text.

The World Is Flat: A Brief History of the Twenty-first Century

What Friedman means by "flat" is "connected": the lowering of trade and political barriers and the exponential technical advances of the digital revolution that have made it possible to do business, or almost anything else, instantaneously with billions of other people across the planet. This book is perhaps the most popular for its historical revelation of how globalization has quickly changed India, China and America.