This is

what I said back on Aug 7th regarding Dow Theory.


A much worse scenario is if phase II (panic) is from January '08 to mid July '08, and we are currently in the midst of a secondary bear market reaction (SR). If so the SR would have further to go, possible retrace 33%, 50%or even 66% of the January to July decline. After the SR (into the election?), then Phase III sets in. Oh boy, if that's the case, then we've probably only seen 1/2 of the bear market with another 50% to go from the July bottom. That would take the Dow down about 40% from the top to the 8500 area. 30% down is Dow 9800 which seems more likely but one never knows about these things.

I remember writing this and thinking that the likelihood of this happening was remote. Remote my ass!! I said it before and I'll say it again, I just wish that I had followed what Dow Theory was saying about the major trends of this market. It would have saved a lot of aggravation. This 2008 is a complete disaster and I can't wait for the year to end. Yesterday someone asked about my year (unrelated to investing). My response was "I survived". And that's a good year? F....ing survival! That's what its come to. Like a soldier getting shot at day after day. That turkey Stan whatshisname walks away from Merril Lynch w/ $150m after engineering the demise of a 100 year institution, and the rest of us are stuck w/ a country turning the corner on some form of socialism (a la France and other European countries) , bail out after bailout that will keep the hard working taxpayer hamstrung for years to come, rising property taxes with no end in sight, a stock market that is shit and is going to stay that way for the foreseeable future, terrible leadership in government, and so on.

On another note, this Holiday season, so far, seems a lot more subdued than usual. Soon we'll start hearing that innocuous politically correct, vintage, USA greeting "Happy Holidays". I really hate that greeting - it's so phony. Nevertheless this Season seems more like the early 1970s than what it has become the past few decades. Nothing more than a marketing tool for the retailers to get people to spend, spend, and spend on junk that we don't really want or need.. I think this is a good thing. An economy and moral values based on purchasing over priced homes and cars, keeping up with the jones, that whole luxury goods rip off thing can't be the foundation to build a strong civilization on. Our predecessors did it on old fashioned values - savings, hard work, and doing the right thing. Hopefully we can get back to raising our kids on these tried and true principles (that work) so that they have a bright future (even if we don't). Living under a mountain of debt ain't much of a life anyway if you ask me. Hopefully in the longer run we'll start to see opportunities given to people that show initiative, drive, and smarts rather than just giving opportunities to these silver spooned Ivy league MBAs, and corp executives, that don't know their ass from a whole in the ground when you boil it down. So a few good things (good always comes from bad) might rise from the fall out Things like a calmer Christmas season, the demise of the investment banking industry, and a principled younger generation. I'll take it... that's what a 50% sell off in the stock market does. It changes things forever!