The two smartest guys in the world have given us the answers that all the markets were awaiting. Karl Rove on Fox news said that the markets were declining this week due to Republican selling based on the rise of Obama in the polls. Alan Greenspan in Congressional testimony said the bubbles during his tenure were due to a flaw in his belief system. So there you have it.
Our big picture forecast, which we have stated many times, is that cycle of these bubbles will last 35 years, 1982 to 2017 and that the bottom in the markets will be in the period of 2011 to 2012. We further have forecast that the S&P 500 will decline from 1565 to 440 before starting to rise again. This is only 2008 and we are sitting at a trading bottom at the S&P 840 level. In our opinion there will be a bounce to the 1250 level sometime in the next 8 months, probably when the Republicans start buying again when they see that Obama really is a Transformational figure as Colin Powell has indicated.
This morning you would get the feeling on CNBC that the world is ending. Our technical indicators point to a confirmation that this is a pivotal area. We are putting our short T-bond positions back on in this 119 area after the 5 point bounce this week. Furthermore, in our Aggressive Portfolio we are moving up to 90 percent long this morning. The Conservative Portfolio sits at 25 percent long because, well, it is conservative.
6:32 AM CDT