BLACK HOLE 2009 “November 21st update”

BLACK HOLE 2009 “November 21st update”

As this point, the market has reached the new low since 2003 and broke a number of critical supports. Dow Jones index broke the psychological support intraday low level of 7737 set on October 10, 2008. S&P 500 and Nasdaq both finished to new low this year. The recent market movement is telling us something. We are NOT out of the danger zone yet. You would be misled by the mainstream media that things will get better in the 2nd half of 2009 and early 2010. AGAIN. Didn’t we hear this back in November 2007, we would have a summer recovery in 2008 as the Fed began to cut interest rate back then.

Financial guru and experts are calling out we will suffer another Depression II in 2010 to 2012. The chance of this happening is still ANYBODY'S GUESS! WHY? Because if we step backward a little bit, the cause of the doom and gloom outlook is the recent CONSUMERS behavior pattern has been in 360 degree complete reversal since the collapse of the stocks, bonds and commodities markets starting in mid-September. That’s it! Sure! A number of big corporations have been bailed out and some are out of business. The truth of the matter is… it’s only happening in wall street and financial markets. It’s still early in the game whether or not we would be in Depression mode. Recession YES. DEPRESSION. YOU DECIDE. We, the CONSUMERS, will decide the final outcome of this. It will be a tough ride, but I am sure majority of us would not want to see a repeat of 1929 and lost decade of 1930s.

What should do we next? Expect the Dow Jones index to be around 5000 to 6000 area in the next 3 to 6 months. The 4th quarter outlook for consumers’ confidence, GDP growth (contraction), retail sales and unemployment would be VERY UGLY. Moreover, malls and retailers in US have been giving out Christmas sales to try to boost up revenue before the final tally close up by Christmas season. One thing I know for sure, it would be one of the worst Christmas sales season we have since early 1980s.

For time being, even though the media has been hyping for a deflationary economic environment, I strongly suggest you to buy some physical gold and silver to hedge against future civil unrest and zero interest rates all over the G-20 nations. As more bailouts and intervention made by central banks and government, holding fiat currency paper is destined to be ultimate losers of this financial black hole.

Take care, stay liquid and be safe! Just prepare and we would be the last ones standing in this troubled time.