The topping process is in place and in the near future we should see the
conclusion to what has been described as the end to the “greatest bull market
In Jim’s own words, “Let there
be no doubt, this time is different, it is my contention that we are
transitioning to a bear market- the first time I have indicated this since 1982”.
This is the end of one of the greatest manias in history. We can look at
previous manias to get a feel for how far it may fall. The Japanese market
mania ended in 1989 and the Nikkei fell over 60% from 39,000 to approximately
15,000. The 1929 stock market went down more that 89% (Dow 41.22 from 381.17).
The world is replete with examples of how manias have ended in other markets
such as real estate and collectibles. A market will normally settle at least
40% from its high. Another important point is that once a market moves below
its support level it almost always goes down below fair market value before
again moving up. Using any of these comparisons it is fair to assume that this
market will probably get close to the Dow 6000 level after it starts its final
fall. It could just as easily penetrate that, going down until it reaches its
next support level. It should be noted that after the 1929 crash the market
recovered slightly then drifted lower for 3 more years before starting its
It is Jim’s contention that one of the finest buying opportunities in
our lifetime will soon be upon us, both on the short and long side. In fact
there are likely going to be several excellent opportunities over a more
contracted period than has been in previous bear markets. It will be
absolutely essential for the safety of your capital that you have a guide to
navigate the turbulent waters that lie ahead.
Knowing what is and what is NOT an approaching crash! The indices
making up the Model’s readings were quite different prior to the correction
in the summer of 1998. The Model gave a Warning in advance, but never gave a
signal that a crash was imminent. Although the Model gave a Sell signal over a
year ago, it has not yet reached the point where a crash scenario is upon us.
At the time that critical mass is reached, Jim will advise subscribers on a
special update. At that time those investors wishing to use leveraged
instruments to profit from the crash, (they are not recommended for everyone),
will be advised as to what he has purchased for his managed accounts. In 1987,
clients realized an average gain of 6700% on their investments although 1
person, a barber, realized a $1 million return on a $10,000 investment. The
S&P is so much higher in 2001 than it was in 1987, a drop of 25% would
result in a much larger point loss. This could result in a much larger gain for
investors using those instruments.