After forming elliptical tops stock markets worldwide have started biggest ever slide – Dow can reach 4000 by 2008
Sam Adelton
Dec. 19, 2006

The stock markets worldwide are showing signs of collapse. The stock markets across the world are in the process of forming an elliptical top that is normally associated with long-term future bear markets. According to some pattern studies, the Dow is completing last leg of the cyclical bull market within the secular bear market. The complacency is high. Volatility is low. The hedge funds are in control. A lot of money is chasing a few stocks. The divergences within the indices are wide as ever.

Interestingly, an analytic study shows bear the refusal of smart money to participate in the final stages of the bull markets triggers markets. That is exactly what is happening now. The real estate market is in deep trouble. The recession is actually deep though stealth in nature confusing Fed. The only outright visible signs is the inverted yield curve. Dow can reach 4000 by 2008. You may think – that is garbage. Well in August 1987. most investors thought that before the massive crash. The indicators are showing parallel signs. Fed increased rate those days after Mr. Greenspan took control as Fed Chairman. Initially market absorbed all that till it crashed. It seems 1987 is being played all over again. Except this time we are experiencing the events unwind very slowly. What happened in 1987 most like likely will be stretched in the current environment over two years. You may not experience a crash but steady decrease in equity valuation.

After forming elliptical tops stock markets worldwide have started biggest ever slide – Dow can reach 4000 by 2008
Sam Adelton
It seems 1987 is being played all over again. Except this time we are experiencing the events unwind very slowly.
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