666 - The Number Of The Beast
It was one year ago this week that the markets finally stopped going down. The SPX low point was 666.79, which was achieved on Friday March 6Th. General Electric also closed at 6.66 on March 5Th and stopped going down at that moment as well.
The SPX made this devilish bottom which ended the 57.7% down draft. The SPX had hit all time highs of 1576.09 on October 11, 2007. Which was incredible considering that the credit crisis was already in the infant stages. The Dow Jones also peaked on that day at 14198.10. The NASDAQ peaked a few weeks later on Halloween at 2861.51
So what we have are these ugly losses from October 2007 to March 2009.
SP 500 - Down 57.8%
DJ 30 - Down 54.4%
NASDAQ - Down 55.8%
But the markets have rallied smartly from March 2009 until today.
SP 500 - Up 70.8%
DJ 30 - Up 63.3%
NASDAQ - Up 83.8%
We shouldn't dilute ourselves. We are in a secular bear market. This bear market started in 2000 when the dot come bubble popped. We are just in a cyclical bull market within a secular bear market. I am hearing that many believe we are in a bull cycle like the ones from 1982-2000 or 1946-1966. This is false. This rally that the market has been enjoying is directly due to the kindness of the Fed. Of course it was the kindness of the Fed that got us in this mess in the first place, but the ZIRP and QE policies have re-liquefied old bubbles. If the Fed keeps the gravy going the markets should still be in rally mode, absence of any catastrophic events in the economy. Housing is still a mess and the banks are still in fantasy land with regards to their bad loans. I am looking for the markets to top out between 10750-11000. I am then looking for a 20% correction that extends through the summer.
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