Friday was a very volatile session, we were down over 100 points, the Dow Jones went below 6,500 and then closed up around 30 points, back above the 6,600 level.
We had a huge down week, I think we had 4 consecutive down weeks in a row.
In terms of gold the Dow is worth fewer than 7 ounces of gold at its lowest point today. That is a new low for the move.In fact I had forecasted last year that the Dow would hit 7 ounces of Gold this year. I just did not expect it would do it by March. My forecast for next year was that the Dow could trade at 5 ounces of gold and it looks like it might even make that in 2009.
I wouldn`t be surprised if there was a rally from here, it can happen at any time am I am sure if there is a rally here, the people are going to start coming out talking about "the bottom is in", "the bottom is in", "you got to buy". Remember, these are the same people that have been saying that all the way down.
Capitulation, capitulation. People were talking about capitulation when the Dow was still above 10,000. And they are still capitulating and the Dow Jones Index is down in the 6,000`s.
I don`t care if the Dow rallies back above 8,000, this bear market is not over, it is going to keep going lower. But more importantly then the nominal price is the real price.
The real price is going to just keep falling as I have just mentioned in terms of gold the market is down well over 80% from its peak 9 years ago.