[jkruer01]

I'm interested to hear everyone's opinions on this. Ok, we had a correction a couple weeks ago where the market dropped 5% in one day.

My question is, do you think that was the beggining of something larger or do you think we are in for a LONG FALL?

I personally think we are in for a LONG FALL and I have several reasons to back it up.

1)Look at all the Rule #1 stocks on your watch list. How many are actually below the MOS price? Not very many.

2)History says we will be for the next 10 or so years. The stock market goes in a stair step pattern where it will shoot up for several years in a row and then be flat for several years in a row. Shoot up...be flat. We have been in a flat market since 2000.
12/1896 - 1/1906 DJIA averaged 10.56%/year
2/1906 - 6/1924 DJIA averaged -0.24%/year
7/1924 - 8/1929 DJIA averaged 30.44%/year
9/1929-11/1954 DJIA averaged 0.07%/year
12/1954-1/1966 DJIA averaged 8.72%/year
2/1966-10/1982 DJIA averaged 0.05%/year
11/1982-1/2000 DJIA averaged 15.09%/year
2/2000-9/2006 DJIA averaged 0.98%/year
If you notice, the flat years usually last for 15 years or more. I personally think we are simply in the first 6 years of a 15+ year flat period. I think the markets will go up and down and they will flirt with the high and maybe go a little above it but eventually fall back down below it. In technical terms there is a resistance level around the 2/2000 mark.

3)Events in the Economy. In the late 90's there was "irrational exuberance" in the market. This finally stopped in the crash of 2000, 2001, and 2002. The Fed lowered interest rates to jump start the economy. The low interest rates caused housing to explode because you could borrow money for a mortgage for so cheap. This led to a different "irrational exuberance". People borrowed more money than they could possibly afford because they "knew" their house was going to go up in value. The lending companies lent out money like they had an unlimited supply. Two things happened. 1)Money was lent to people that it shouldn't be lent to and 2)People borrowed more than they should with an adjustable rate mortgage.
Now the first group of people are defaulting on their lowns and the 2nd group of people are having their adjustable rates increased which increases their monthly payments and now they really can't afford it. Both of these things are happening at the same time which is going to cause people to default on their mortgage and file bankruptcy. This is going to flood the market with homes and home prices will fall. The feul that has been fueling the economy ran out and the economy is going to fall. This will cause the stock market to fall.

All of this is just my opinion. I would like to hear what others think.