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Tuesday, June 23, 2009

Bear Market target

The market as discussed this past weekend has entered into a downward cycle. The SPX target for me is currently 810. Between 810 and 780 will be where I start to question how far will this go. IF SPX closes below 780, I expect new market lows, target 650-ish. WARNING: FOMC meeting Wednesday, announcing at 2:15pm, some serious games could make the market rally.

In a previous post, I showed how the xtrends blog listed the SPX valued in terms of gold. What makes this interesting is it shows the US Stock market valuation in more "absolute wealth" terms. Xtrends called for the stock market back around May 22nd to bounce off of the trend line he drew and the market would retreat. Xtrends re-affirmed this prediction this past weekend, and today it came true. I mention it as that this valuation for SPX in terms of gold I find extremely interesting. See SPX in terms of gold chart below.

From WebSurfinMurf's Financial Blog

I also posted how the US Treasury interest rates where entering into a territory where the US Government would want to ensure it did not continue to rise. The way to do this was to crash the US stock market so the US government could create more US bonds at reasonable interest rates. See this chart to see how this tactic has worked, by collapsing the US stock market, the US Bonds interest rates have come down....a little...in correlation to the move down.

From WebSurfinMurf's Financial Blog

Lastly, SPX stock chart to show where target is for this next bear move down. NOTE: It is possible we will NOT see these levels again for years. If you are long, you should consider selling some of your positions.

From WebSurfinMurf's Financial Blog

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