DIA @ 115.21 BUY BUY BUY.
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2005 DIA 105.8 – 9% = 96.2 .......actual 96.4
2006 DIA 114.7 – 8% = 105.5 ......actual 105.3
2007 DIA 127.8 – 10% = 115.02 ........ACTUAL 115.21 / ???
On calculator, enter 105.8 (hit minus key) enter 9 ( hit % key) , look at answer. Answer = 96.2 = 2005 DIA computation.
WHY 10%…..subject to interpretation.
1950’s (1954 ??) DIA down 10%, went on to newer HIGH’S
1980’s (1983 ??) DIA DOWN 10% went on to newer HIGH’S
I can Throw out DIA 110.0 thru 114.9 because (These numbers aren’t possible). They aren't possible, because it will make history. I don't think the market is going to make history.
DIA 117/118 = 200 DAY ( important that you make visual on the chart, On stockcharts it's called MA 40) ( THE THIN BLUE LINE)
127.9 – 8% = 117.6
127.9 – 9% = 116.3
Both 2005 and 2006 corrections dipped just a little below 200 day…(8% doesn’t dip below 200 day)
(9% barely does dip below 200 day)
(10% exactly matches both 2005 and 2006 dip below 200 day.)
127.9 – 10% = 115.0
I choose 10%, because I think by the end of Q4 the DIA will take out 127.85….
Thus this correction is more like 1954 and 1983. ( and I've heard other pundits, talk about this)
You may want to choose 8% or 9% and you may be right. After all a 10% correction isn't written in stone.
Next question is are we in a correction. The answer is YES.
The market has to throw out every stock that has SUB Prime exposure.
And there’s a trillion dollars of exposure.
A trillion dollars out of the market affects the DIA approximately 10 points.(I think) 127.9 – 10 = 117.9 . Will the trillion come back into the market.
YES, MOST Forward corporate earnings are still on fire.
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