Where is the bottom?

December 18 2008 by Jason Byrne

I'm not going to pretend to know when and where exactly the bottom is, but I will say that it is within the next year and it is not 6500.  So many naysayers are being so pessimistic and I think they're just plain out of their mind.

Don't get me wrong, the situation is bad.  And, frankly, I am expecting (and hoping for) another big drop.  We are in a bit of a sucker's rally right now probably.  After Christmas numbers come out hopefully we'll see another beating on Wall Street and we'll see the upper 7000s again.  This will be a great gift to unwrap for all wise investors, an awesome After Christmas Sale.  I know I'll be buying at that point and so should you.

But "the fundamentals of our economy are strong" hahaha... sorry, couldn't resist quoting the man I voted against.  Right now we have gas prices back down to where they need to me.  We have interest rates slashed to the point to where they are basically giving away money.  You have a lot of pent up buying demand.

The only thing that's hurting is people getting laid off, but even that isn't as bad as it's been during recessions in the past.  Most people FEEL effected by the financial crisis, but aren't. 

You can't keep the American economy down for long... especially when money is being pumped in so readily.  Inflation has to happen.  It has to. 

They say stock market always comes back 6-8 months before the actual economy does.  And with big, strong companies paying dividends of 5-8% the share prices really really can't get much cheaper.  No way the market lets GE pay over 10% yield!

So if I had to call it what I expect to see is the bottom happening somewhere between January and March.  You should know it when we see numbers in the 7500-8000 range again.  Then it should be a slow march upward before a big spike at some point in late 2009 or early 2010.  If you see that then you've just missed your chance.  Economy as a whole should start to see that recovery in late 2009 or early 2010 around the same time that big spike happens.

So... in summary... this is a sucker's rally now and we'll be lower again, but next one won't be a sucker's really.  That's my prediction!  Write it down! Because after I'm right they'll be inviting me on CNBC as an analyst. lol

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Tags: Stocks, GE (Quote), Economy

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