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Monday, August 03, 2009

Dow 5,000?

As a rough rule of thumb, a bounce can be expected to recover half of the losses from the crash. The Dow went down 7600 points below its pre-crash high. So, we can expect a rebound of about 3800 points – which would put the index back around 10,300. By that measure, this rally could still have a lot of life in it – enough to convince practically everyone that the depression will soon be over. Don’t believe it. This depression is going to last at least a few years…and the bear market isn’t over. The Dow will eventually close below 5,000. At least…that’s our story and we’re sticking with it.
-- from "
Showdown With the Bond Vigilantes"
by Bill Bonner


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