Wednesday, November 12, 2008

My Stunning Prediction for the DOW

Lets look at the facts first before I make my shocking prediction

  • In October of 2007 the Dow reached a high of approx 14,000 points
  • The GDP of the USA is based on 70% consumer spending.

Are you seeing where I am going with this?

If a 70% drop in in GDP, and stock earnings from October of 2007 would translate into a 70% drop in the DOW, that would account for 9800 lost points. Is it that illogical to conclude that
if Americans stopped all consumer spending that the DOW would only be worth 4200?

Now, I don't believe that Americans will completely stop spending, but I do feel with a huge recession, and very probable depression on the way it is very reasonable to think that consumer spending will drop significantly.

Therefore, I predict that the stock market will drop further, and will not bottom out until it goes below 6,000.

This is not the end, its just the beginning of the end.


Anonymous said...

I think that is a very fair prediction (Dow 6000).

BTW, a belated Congrats regarding your marriage.

Kevin Tomlinson-Miami Beach Real Estate said...

I think you are right!

chrispycrunch said...

Agreed! The longer bad news lingers, the longer markets will head downwards. Nov is just another oct 08 and Dec will be worse.

this is the worst x-mas ever!

View My Stats