6 PM Thursday Evening, July 7. The DJIA closed at 12,720 today

6 PM Thursday Evening, July 7. The DJIA closed at 12,720 today, Thursday July 7. It has gone up rather quickly from its close of 11,934 on Friday June 24. I had thought it would recover the next week to 12,500. It closed the week at 12,582 on Friday July 1. From there I thought it would not change much, fluctuating +/- 75 points, i.e. between 12,507 and 12,657. Today it broke out on the upper end and closed at 12,720. My forecasts depend heavily on macro-economic analysis, and I still think the economy is weak and troubled, though struggling to recover. My forecast for the year 2011 is the Dow fluctuating between 11,900 and 12,900. From its close of 12,720, accordingly, it could continue to run up to the 12,900, but I am thinking it is beginning to get set for another correction downwards. Downward corrections have displayed a pattern in the past: they are sudden drops after long, gradual rises, or recoveries. This is because, I think, the market is playing on hopes and fears. It is rising as investors are hoping for a recovery, but it drops on fears. On the way up, all markets gather speculators along the way, i.e. investors who are just playing the market for a quick in-and-out, to gain on a short-term asset price increase. Because of this built-in bubble effect on market rises, there tends to be a bursting bubble effect, which causes the market drops to q sudden and more precipitous than the rises. Consequently I do not trust of expect this market to be able to break 13,000 this year. When it runs up quickly as it has in the past 10 days and starts approaching this 12,900 upper end barrier, I expect a natural resistance to come into play. Then you just wait, because there is going to be another panic-type correction to below 11,900 before the year is done, as sure as there are death and taxes and crabgrass, What I am trying to do the last couple days is sell some of my large-cap equities, but just 5% or so, and setting it aside as a cash reserve. That way, I will not get caught flat-footed when the correction comes. Then I will watch for the market to drop below 11,900 in order to buy back in. Since I forecast and still feel the Dow will close the year at 12,700 and go into the 13,000's in 2012, anything below 12,000 creates a buying opportunity. In the past, I have missed what I thought were good buying opportunities because I did not have any cash, and it was to late to sell one thing to buy another, because everything was down. So this time I will have a small cash reserve and hope to get some good buys. So what I have described here could be called my medium-term strategy, for lack of a better term. I should have short-term tactics and a long-term strategy in place as well, of course. And, since I do not consider myself a trader, I will characterize this modest selling I am doing as “repositioning my assets”. Haha. Well, that’s the term they use! That's all for now! I hope all this is perhaps .. prescient! But we will see! What do you think, and what will you be doing, anything?