Sunday, March 29, 2009


So, how have the stock market, U.S. Dollar and gold held up since this bear market began? The top was in for the stock market on October 11th, 2007. Using the closing prices from 10/11/2007 and the closing prices from Friday (3/27/09), here's the latest results for our bear market so far, which unfairly ignore dividends and interest payments:

I will leave it to the reader to decide if he or she wants to add in some interest payments or dividends to see how much the returns on stocks and the U.S. Dollar could be goosed higher, although any reasonable attempts will still show that gold has come out on top. I believe gold will continue to outperform U.S. Dollar-based cash equivalents (even after factoring in interest) and I believe both will continue to trounce the stock market.

Those still trapped in bullish general stock positions due to 401k/403b accounts that allow no reasonable options should be getting ready to hit the exit button (and moving to whatever cash-equivalent investments are available). The spring rally in stocks should have another 4-10 weeks left in it, but then my widow and orphan sell signal will be generated. This is a signal not to be ignored, as the stock market may well lose more than another 50% from the spring top once it arrives.

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