Market Forecast – Stocks Bonds Gold CDN & US Dollars…..the works

Posted by Peter Grandich -

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At 54, I feel time is flying by and my mortality becomes more evident. They say that memory is the second thing to go. I feel like many things are going or already gone. Dizzy Dean once said, “I ain’t what I used to be, but who the hell is?” Amen, Dizzy!

One of the first things they teach you in driving school is never to go forward without first looking back. In order to “prophesy” (make a good guess), I’d like to first look back at what I’ve said and try to honestly self-evaluate my performance. No matter what grade I give myself, I put my pant legs on one leg at a time, too (and more slowly as each year passes).

As the year 2007 progressed, I continued to talk about how America was robbing Peter to pay Paul, but Peter was tapped out. I was waiting for the Fed to make one more easing move that I believed would be the last silver bullet in their arsenal to hold up a house of cards built on insane mortgage lending and borrowing beyond our means. I went so far as to point out that singer Shania Twain was bang on in her assessment made in her song “Ka-Ching.”

Finally, on October 14th, I issued a commentary entitled “Man Your Battle Stations.” I dare suggest just a couple of days after the U.S. Stock Market made an all-time high that one should sell everything except precious metals-related investments and even dared suggest shorting the stock market. I think it’s just as important to look at what was the general thinking at the time when such a forecast was made as to the actual forecast. The crisis about to unfold was not a widely-held belief nor was how close the world would come to find itself facing the abyss.

It wasn’t long before the house of cards came crumbling down. I didn’t completely escape, as I held junior resource stocks that got crushed and also suffered serious illness to the point it became truly life-threatening (we’ll discuss this in detail when I finish the book I’ve been writing).

By early 2009, the world seemed on the brink of economic Armageddon. Thankfully, my illness would leave me almost as quickly as it came. By early March, the stock market became so oversold that my technical work suggested we could see one of the biggest bear market rallies of all time. While I bid farewell to the bearish camp, I by no means was embracing the “Obama Mystique” that was engulfing the nation at the time. In fact, I openly stated (to much criticism via email and other means) he would prove to be the worst President ever. On March 6th, I left the bear camp. The market would end up bottoming just one day later.

As 2009 progressed and the market began to seriously rebound, I began to focus on a couple of numbers and time frame. I said my work suggested a run to 10,500 – 11,000 on the DJIA and both a market an economic peak by June/July 2010. Again, keep in mind what the current thinking was at the time.

Throughout the rally, I continued to say that while not in the bear camp (betting on a decline), I was in no way suggesting a new bull market was born such as the “Don’t Worry, Be Happy” crowd on Wall Street was peddling. My argument throughout 2009 and up until most recently was that we were in an eye of a storm, and at best that eye could last until June/July 2010 before the second part of the worst-ever economic, social, political and spiritual storm to hit America took hold again. It was my belief throughout this time period that the U.S. stock market was going to trade similar to that of the Japanese market from 1989 on.

As noted about a zillion times over the last couple of decades, I believe the vast majority of people who work in the financial industry are heavily tilted in their views to the “always positive” side of things. I truly believe you could toss them off the top of the Empire State Building and all the way down they would say the same thing: “so far so good!”

Per my June 29th commentary,whatever delusion of grandeur the “Happy” people had been able to muster to the sheep that always seem to follow them, died on this date. With that, my belief stated for months (if not a year or more) that the highs made earlier this year and the low made on March 9, 2009, could prove to be the top and bottom of the market for years to come (aka the Japanese market 20-year trading range).

Bottomline – It may seem too simple to some (and in this business many seem to need a long, drawn-out commentary in order for it to be a satisfactory conclusion), but at the end of the day America has lived way behind its means, has too much stuff and can never truly make any real headway until it comes to grip with this. The  fact that our problems have grown acute during a period when we moved away from who our forefathers placed their trust in is no coincidence.

The list of troubles is a mile long and while I will discuss some key factors in a moment, I once again state that we can’t and won’t solve decade’s worth of economic, social, political and spiritual problems in a week, month or year. There’s no quick fix (Obama’s misguided bailouts have and/or will prove that).

When it comes to the U.S. stock market, I feel pretty darn good about soothsaying its direction over the years and in particular the last two or three.

Go HERE and scroll down below the above to read Peter’s Rorecast on these specific Markets

U.S. Stock Market – U.S. Bonds – Metals – U.S. Dollar – Canadian Dollar – Oil & Gas – Model Portfolio