Ian Gordon pointed out to me that at the bottom of major cycles, the lows are lower than the beginning of the stock market bull runs. In other words, the higher the rise, the harder the stocks fall.
From 1921 to 1929 the bull market rose 500%. But from 1982 to 2000, the market rose 1,500%. If the next stock market bottom were to simply equal the bottom in 1982 it would have to fall to 729. Because these bottoms fall below their bull market starting point may perhaps provide the basis for Robert Prechter’s view that the market will fall to below 500. Keep in mind that Dr. McHugh’s work suggests a decline from zero to 1,000. Ian Gordon joked with Robert Prechter on my radio show that he was “bullish,” relative to Robert. Ian’s call for Dow 1,000 is based on the fact that the Dow had for many years found 1,000 to be a resistance. And since prior resistance points often become future support levels, Ian is calling for a 1,000 Dow bottom.
Robert Prechter told your editor that he considers this a Grand Super Cycle and as such a magnitude worse than the 1930s’. The 500% rise of the 1920s and the 1,500% rise from 1982 to 2000 provide at least part of the basis for the term Grand Super Cycle that Ian Gordon, Bob Prechter, and Dr. McHugh believe we are in.
Hope and pray. That is about all we can do, aside from using our brains to convert intrinsically worthless paper money into possessions of substance, starting with that most portable and durable form of wealth—gold—and then silver.
Jay Taylor
Gold Investor
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