On
6/10/2011 Friday the DJIA closed at 11,951.91, exactly within the predicted
11,900 to 12,000 range predicted for the correction.
The DJIA, the NASDAQ and the S&P 500 are up, but ... there
are major drags on the economy: unemployment at 8.8%, residential real estate
prices, personal bankruptcies, petroleum prices, fighting three wars, the
federal budget deficit, still recovering from traumatic credit markets crisis,
unfavorable trade deficit (high imports and low exports), ... all these things
prevent the stock market from going much higher.
More of the Prediction on 4/28/2011: “All sectors of the economy
being inter-related, one sector can’t advance too far with others lagging.
There needs to be health in major sectors. The stock market reflects investors'
estimates of future prices and cash flows (dividends and capital gains).
It looks like there are going to be at least two major
corrections in the equities markets in 2011. They could come at any time, but
it is likely that we will have one very soon. Our prediction was that the DJIA
would fluctuate between 12 and 13,000 during 2011 and close at 12,700.
So what, if any, trading action would be advised? Sell a percent
of one of your equities tomorrow, April 29 (unless the market is already taking
a big drop already, I guess: if the market is steady on opening). Hold the cash
for about thirty to sixty days, looking for the market correction to reinvest
it in another equity. (You can’t buy back the same equity for thirty days or
have a wash sale.)”
What
we are trying to do is macro-economic analysis applied to investing, I guess.
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