Bear Flag Blog

Well, my prediction of a January bounce appears to have been wholly incorrect, but my accompanying prediction of a subsequent collapse seems downright prescient. When the market had its first dizzying one-week plummet late last year we yanked more or less all of our liquid investments out into cash; there was some worry we were selling at the bottom and the market would turn right around. That worry has certainly evaporated now!

In any case, I maintain that there's no reason to anticipate the stock market rising until there is some reason for it to do so, and I see no such reason. Economic indicators are still crumbling, jobs are being lost, there's no sexy new technologies to rush to invest in... at some point, things will turn around. But not soon.

I do wonder how low the Dow will go. 6,000? Probably. 5,000? A rather frightening possibility. 3,000? It seems laughable, but...