Safehaven | Long-Term Projections Not Pretty

October 26, 2008

Long-Term Projections Not Pretty
by Mike Paulenoff

The enclosed weekly chart of the DJIA has the look of unfinished business on the downside prior to completing the decline off of the October 2007 high.

My annotated directional lines show what the chart would look like based on my current scenario of the Dow heading towards the October 2002 low below 7200.

Reviewing the monthly chart on the S&P 500, some landmark target zones are 1) the 2002 low at 768.60; 2) the trendline from October 1987 across the 1990 low, which cuts across the price axis in the vicinity of 740; and 3) the current downleg target zone calculated off of the 2002-09 upleg, which equals 580!

Mike Paulenoff
www.mptrader.com

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.